Budget 2011: Duty escalator to stay

By James Wilmore

- Last updated on GMT

Related tags: Alcohol duty escalator, Tax, Beer, George osborne, Chancellor george osborne

Chancellor George Osborne has confirmed in today's Budget the alcohol duty escalator will stay - meaning the price of a pint will rise by around 4p....

Chancellor George Osborne has confirmed in today's Budget the alcohol duty escalator will stay - meaning the price of a pint will rise by around 4p.

Despite sustained opposition from the industry, Osborne announced the coalition will stick with Labour's controversial escalator which will see duty rise by two per cent above inflation - a total of 7.2 per cent - at midnight on Sunday.

"I have no further changes to those measures put in place by the previous government," Osborne said.

This will put almost 4p on the price of a pint, according to the British Beer & Pub Association.

The full Treasury document says: "The Government is committed to fair excise duties on tobacco and alcohol which contribute to deficit reduction whilst supporting health objectives."

The Chancellor also confirmed that tax on beers below 2.8 per cent would be cut by 50 per cent - and duty on beers above 7.5 per cent would rise as the result of a review of alcohol taxation last year.

These changes will be introduced on October 1 this year. The Treasury said the cut in duty on lower rate beers is designed to "encourage their production and consumption".

Osborne also pledged there would be a three-year moriatorium on new regulation for firms with fewer than 10 staff.

The rate relief holiday for small businesses will also be extended to October 2012, he said.

Related topics: Legislation

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