BBPA renews call to scrap tax escalator, in light of inflation rise

The British Beer & Pub Association (BBPA) has called on the government to scrap plans for what it calls "record-breaking" tax rises on beer.

Noting today's announcement that RPI inflation had risen to 5.1 per cent, up from 4.8 per cent, the BBPA said the additional two per cent that will be added to this figure if the current government sticks with the previous administration's 'duty escalator' meant duty on beer at the next Budget would be 7.1 per cent.

Brigid Simmonds, the BBPA's chief executive, said: "With these inflation figures, and along with the VAT increase [from 17.5 per cent to 20 per cent], the Chancellor is set to introduce the biggest ever rise in tax on beer in a single year.

"The government is creating a vicious circle of rising taxes causing further rises in inflation, which leads to yet more beer tax hikes in the future.

Simmonds said the end result of what she called a "chain reaction" would be the loss of jobs, pubs and community assets.

"Yet there is a far better way forward," she added. "Scrapping the 'escalator' would give an immediate lifeline to struggling pubs, and could save over 10,000 UK jobs in a single stroke, bringing in more government revenues.

"It is surely time to call a halt to a policy that rightly belongs in the past."

RPI inflation figures measure a basket of goods and services and unlike CPI, include mortgage interest payments. CPI inflation rose from 3.7 per cent in December to four per cent in January.