Big brewers face Healey PBD snub

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by Tony Halstead Treasury minister John Healey has played down the prospect of progressive beer duty (PBD) being extended to more brewers in next...

by Tony Halstead Treasury minister John Healey has played down the prospect of progressive beer duty (PBD) being extended to more brewers in next spring's budget. Healey was responding to an article by MP John Grogan in the Morning Advertiser, claiming that Chancellor Gordon Brown was set to extend the scheme to bigger brewers. His comments will come as a blow to many larger regionals, which have been campaigning for the progressive duty scheme to be expanded. In a letter to the MA, Healey said views were being sought from all breweries, but continued: "No decisions have yet been made on changes to the scheme, and we will look at all options for the next budget. However, we will not want to make changes to the scheme which could harm those smallest breweries it was originally intended to help." Larger brewers, backed by the British Pub & Beer Association, want the current PBD rate raised from the current annual 18,330 barrel cut-off figure to as much as 122,205 barrels, giving a sliding scale of duty relief to all but the biggest UK brewers. Companies whose production levels remain just over the threshold complain they are being hit from both ends of the industry, while those under claim it inhibits growth. Mike Clayton, managing director of Cumbria brewer Jennings Brothers, whose output sits on the 35,000 barrel mark, said: "The current situation has left companies like Jennings exposed because we are now being squeezed by smaller companies on one side and trying to compete with the nationals on the other." l Letters ­ p14 Licensees braced for hit in April Budget Experts say the Chancellor needs to plug a £10bn black hole in public finances ­ and there are fears licensees could be among the hardest hit. His money-spinning measures could include: l Another rise on alcohol duty in next April's budget. Shepherd Neame managing director Jonathan Neame said: "I would fear the worst because the Government needs to get tax from every quarter. Logic dictates he has got to fund spending from somewhere. A rise of 1p on beer duty has to be a strong possibility." l Pubs with long leases of 20 to 35 years will be hardest hit by changes in the stamp duty system, to be introduced on 1 December. The new method requires businesses to pay upfront 1% of the total rent payable under the entire lease. Up to now, stamp duty has been charged once on the average annual rent at a rate based on the length of the lease. l Income tax may have to rise by 3p in the pound. "Unless the Chancellor wants to break his own golden rule about borrowing, he is either going to have to scale back the public spending figures or raise taxes in the run-up to the next election", said Peter Spencer, economic advisor to the Ernst & Young Item Club. l Licensees who own a home could be hit by an extension of capital gains tax. CGT currently only applies to profits made from a second home, but there are reports Brown could extend it to sales of all property. Such a move could raise £11bn for the Treasury.

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