The net rate of pub closures has increased from 12 to 18 per week, according to new figures that come as the campaign against the beer duty escalator intensifies ahead of the debate in Parliament today.
The Pub Tracker from CGA and the Campaign for Real Ale (CAMRA) shows that more than 450 pubs have closed since March. The net closure rate of pubs was 18 per week between March and September, up from 12 between September 2011 and March 2012.
CAMRA said 5,800 pubs have permanently closed since the beer duty escalator, under which duty rises by 2% above inflation each year, was introduced in 2008.
Mike Benner, CAMRA chief executive, said: “For too long, Britain’s beer drinkers have been forced to endure inflation busting rates of tax on their pint, while the Treasury’s own projections show that these hikes will fail to bring in any additional revenue over the next three years.
“As today’s pub closure figures show, the future of Britain’s valued community pubs remains in jeopardy. With pubs finding it ever harder to maintain consistent footfall at a time when prices are ever increasing, it is only hoped that Parliament will today take the first steps by voting to review punitive taxation policies on Britain’s national drink.”
The debate, which followed an e-petition that gained over 100,000 signatures, is to take place over three hours in the House of Commons today. The motion to be debated will ask for a thorough review of the economic and social impact of the beer duty escalator to report back before the 2013 Budget.
This week a letter signed by 11 trade bodies from the sector, and others that rely on a healthy beer and pub industry, to Treasury minister Sajid David said that the Parliamentary debate “offers a unique opportunity to look again” at the duty escalator.
The letter says: “The industry understands the need to reduce the deficit, but this policy is not suited to achieving this aim. The most recent Treasury estimate suggests that the policy generates just £35m in additional duty, but this does not take into account the loss of other revenues generated by falling sales, failing businesses, the disincentive to investment, and the resulting loss of vital jobs across the country.
“Our industry supports almost one million jobs throughout the UK, from agriculture, manufacturing and retail and many specialist sectors in between. The beer and pub sector adds £19.4bn to the UK economy and already contributes over £11bn in taxes. However, in taxation, there is little more to give as demonstrated by thousands of pub closures and declining beer sales.
“While the Government has offered some assistance to small businesses, this has had little impact when set against the duty escalator. We would therefore urge the Government to go further, by looking again at the wider economic and social impact of this damaging policy. The review proposed in Thursday’s motion would ensure a greater understanding of the wider impact of the escalator and how, ultimately, a change in policy would allow this valuable sector to contribute towards growth.
“We sincerely believe that such a review would be popular across all parties in Parliament and would be warmly welcomed by the general public at a time when household budgets are stretched. Just as importantly, it will be good for UK plc.”
The letter is signed by British Beer & Pub Association chief executive Brigid Simmonds and countersigned by members of trade groups including CAMRA, the Association of Licensed Multiple Retailers, the Federation of Licensed Victuallers’ Associations, the National Farmers Union, and the British Hop Association.
Meanwhile, the Society of Independent Brewers, which also signed the letter, has warned that many Coalition MPs are continuing to defend the duty escalator on the basis that it provides revenue needed to pay down the deficit, although SIBA pointed out that the Treasury’s own figures show this not to be the case.
SIBA chairman Keith Bott said: “We were surprised at how many Coalition MPs, in their reply to our members, claimed that the escalator needed to stay in place. The standard response seems to be that 'revenues from alcohol excise duty make an important contribution to reducing the deficit we inherited from the last Government'.
“However, according to Treasury estimates, the Exchequer will receive just £35m in additional duty from the escalator in 2013/14. This amount would be largely offset by the boost in sales and employment related taxes that a beer duty freeze would create – Oxford Economics calculates that this would save 10,000 jobs by 21014/15, mainly in pubs.
“We are nonetheless heartened by the support from many MPs who are sympathetic to our cause - because they have seen the ruinous effect of the escalator on pubs in their constituency.”
