Pub Industry Call for Duty Reduction in Face of Budget VAT Hike

A VAT hike to 20% would raise the price of a pint by 6p and cause the loss of 7,000 jobs a year, without a compensatory cut in duty reports the Morning Advertiser.

The report by Oxford Economics forms part of a budget submission to Chancellor George Osborne by three organisations — the British Beer and Pub Association (BBPA), the Campaign for Real Ale (CAMRA) and the Society of Independent Brewers (SIBA).

The submission calls on Osborne to freeze duty and set out plans for a fairer tax system that recognises beer as a lower-strength drink.If VAT is increased to 20% at the Budget on 22 June, the three bodies call for a 4% compensatory drop in duty, which is 1.6p per pint.

Oxford Economics state that such a move would mean £114m to the Treasury in tax receipts next year and £134m in 2011/12.The BBPA is encouraging pub goers to lobby the Chancellor through the I’m Backing the Pub website.