PMA Budget opinion: Credit where it's due

20-Mar-2013 - Last updated on 20-Mar-2013 at 14:11 GMT

Related tags Beer duty Public house George osborne

Willock: "The beer duty escalator campaign was a great example of an industry temporarily parking its differences and pulling together towards a common goal"

So, it’s finally been halted. Chancellor George Osborne has hit the ‘emergency stop’ button on the hated beer duty escalator – something that was going nowhere except to the ruination of Britain’s brewing and pub industries.

The news made for good headlines in this morning’s newspapers – with The Sun calling today’s budget ‘bitter-sweet’. Get it?

Not only did the tabloid claim an exclusive on the story, it also claimed credit for the decision with the statement: “Mr Osborne’s ale reprieve marks a big victory for The Sun’s month-long Axe Beer Tax campaign.”

I don’t want to downplay the importance of the late support of the national media or begrudge them their self-congratulations. They might well have been instrumental in getting the policy change over the line. Who can forget their role in scuppering the proposed pasty tax?

But of course some people have been on the case with the beer duty campaign for more than 30 days. And the PMA can and will afford to be more generous with our praise.

I’ll start with Chris Keating, the marketing manager at Marston’s Wychwood Brewery, who got the ball rolling with the seminal petition that secured more than the 100,000 signatories required to trigger a parliamentary debate – not an easy task in itself (it was only the 12th Government e-petition out of over 16,000 submitted to have reached the landmark).

That Hobgoblin-fronted campaign was powerfully supported by CAMRA, the BBPA and the ALMR, who gave it much needed momentum. And it was also adopted, crucially, by two heroic parliamentarians – MPs Andrew Griffiths and Greg Mulholland, who led a powerful House of Commons beer and pubs love-in.

Even iconic Wetherspoons chairman Tim Martin recently (and temporarily) switched the focus of his otherwise single-minded efforts to demand a VAT reduction for pubs and restaurants to throw his weight behind the beer duty cause – surprising even his own management team in the process!

We must also thank the Treasury officials and ministers for listening to the logic of our arguments, and believing once again in beer and pub. Sajid Javid and ultimately George Osborne must have been persuaded by our job creation advice, by our defence of a British manufacturing, retail and export success story and by the calculations that showed beer duty was becoming increasingly self-defeating as a revenue raiser.

The beer duty escalator campaign was a great example of an industry temporarily parking its differences and pulling together towards a common goal. Of course there are other battles to fight and wars to win – but this is a big victory.

So what does it mean for pubs and brewers? Well from midnight on Sunday beer will be around 1p a pint cheaper than it is this week, and next week it will be 6p a pint cheaper next week than it would otherwise have been. And over the course of the next 12 months, it will actually fall in price in real terms behind the rate on inflation (notwithstanding any increases imposed by brewers as a result of higher input prices and by wholesalers and tied-pub landlords as a result of their own pressures and motives).

It is a politically essential response to today's good news that pubs pass on the 1p tax cut to their customers and advertise this small but a psychologically important fall in prices.

If the government can see pubs passing on the benefits of a duty freeze to their customers, thereby stimulating trade, putting more money through the tills and increasing the overall tax take for the Treasury, it might spark further ministerial ‘generosity’ towards the trade.

Who knows – we might even win the VAT argument. With help from The Sun, of course!