MPs will lobby to force introduction of sliding scale for beer duty

The government could make a dramatic u-turn and introduce a comprehensive sliding scale of beer duty, after complaints about Gordon Brown's Budget.

The British Beer and Pub Association (BBPA) has joined forces with the Conservative and Liberal Democrat parties to lobby the government for a sliding scale of beer duty in line with the rest of Europe.

The BBPA wants to see tax relief for brewers who produce fewer than 120,000 barrels (200,000 hectolitres) a year to be incorporated in the Finance Bill next month. The move would be equal to duty breaks seen on the continent.

Under current proposals, announced in last month's Budget, only the smallest brewers - those who produce fewer than 18,000 barrels (30,000 hectolitres) - will benefit.

But many in the industry believe small and medium-sized companies, who are also being squeezed from the market by the global brewers and national pub companies, should benefit from any sliding scale.

The introduction of the sliding scale duty scheme, which was welcomed by small brewers, will see some microbrewers 14p better off for every pint they make.

The BBPA has calculated this move represents a saving of £15m to the industry. To incorporate the 30 brewers in the 18,000 to 120,000-barrel "poverty trap" would only cost the Treasury an additional £3m, according to its research.

Sales of beer are worth £5.5bn to the Treasury each year.

About 30 brewers have been ignored by the Budget proposals, including Adnams, Brakspear, Hook Norton and Timothy Taylor.

Brakspear, the 200-year-old Henley brewer which produces close to 40,000 barrels a year, is understood to be reviewing its operations and could stop making beer altogether because of rising costs.

Chief executive of the BBPA Rob Hayward is spearheading the campaign for a government u-turn. "We will be making representations and lobbying the government very hard," he told thePublican.com.

"Both Conservative and Liberal Democrat MPs have tabled amendments to the bill which are framed around our suggestions."

The Budget proposals will be drafted into a Finance Bill, debated in the Houses of Parliament, and then go to a committee in about a week's time. The committee will comprise 20 to 25 MPs made up from parties in proportion to the House.

This means that Labour will have a large majority. "If we are not successful, the aim is to put a marker down for future years on behalf of those 30 companies that were not included," added Mr Hayward.

The BBPA has also launched a poster campaign to inform brewers, pubs and customers that "not a single penny has been cut from the tax paid on 99.5 per cent of beer brewed and sold in Britain".

It points out that the 50 per cent tax break announced by the government only applies to microbrewers.

Related stories:​

Brewers slam Budget's 'misleading' duty claims (26 April 2002)

Chancellor accused of "conning" beer drinkers (18 April 2002)

Budget: Small businesses boost from red tape cuts (18 April 2002)

Budget: PPSs hit by 65 per cent duty rise (18 April 2002)

Budget: Responses from the trade (18 April 2002)

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