Fury as tax hikes hammer trade
The future of Britain's pubs has been put at risk by the staggering eight per cent alcohol tax rise, according to a leading trade group.
In his Pre-Budget Report yesterday Chancellor Alistair Darling announced there would be an eight per cent hike on alcohol tax - meaning duty has now risen 17 per cent this year alone.
He also confirmed that VAT would be cut from 17.5 per cent to 15 per cent, but any benefits to the trade have been swallowed up by the tax rise.
It is expected the duty increase will lead to an extra 3p on a pint of beer at a time when many licensees had hoped to be able to reduce prices in light of the VAT cut.
And while VAT reverts back to 17.5 per cent in 13 months time, alcohol duty is not expected to be lowered at that time.
Nick Bish, chief executive of the Association of Licensed Multiple Retailers, said: "The announcement is one big gamble and yet again the Chancellor is risking the future of Britain's pub industry.
"The Pre-Budget Report is entirely based on the assumption that the economy will grow again in 2010 which is when the new personal taxation starts to bite. But for pubs the tax grab starts next week, continues in April with the Duty Escalator and strikes again on New Years Day 2010 when the VAT goes back to 17.5 per cent.
"Mr Darling is squeezing pubs and bars for the stake money for this gamble and all based on optimistic Treasury forecasts of economic recovery by 2015; these will inevitably be wrong - how wrong we don't yet know."
Meanwhile John McNamara, chief executive of the BII, said he was "staggered" by the hikes.
"Here we go again! I'm staggered that, while all other businesses are being given a boost by the lowering of the VAT rate to 15 per cent, the licensed retail sector is yet again being singled out with an alcohol duty rise to off-set the cuts.
"But the real poison pill is that the duty will be maintained after the VAT cut is restored in January 2010. Despite all the representations our industry has made to the government via our many channels, the Chancellor continues to batter us."
