THE Government has defied calls from more than 100,000 protestors and MPs from all parties to end inflation-busting tax hikes on beer which politicians fear are causing pubs to close in their droves.
MPs from all sides of the Commons yesterday called on Ministers to scrap the so-called “beer duty escalator” introduced by Labour in 2008, which automatically hikes the price of a pint by two per cent above inflation every year.
The debate was sparked after more than 100,000 people signed an online petition of protest, and was led by Leeds North West MP Greg Mulholland, who chairs Parliament’s cross-party Save the Pub group.
“This debate is about out national drink – beer,” Mr Mulholland said. “But also it’s a debate about a major national industry.
“Brewers up and down the country are finding this a problem. My local breweries, Wharfebank, Briscoe’s and Rodhams and other Leeds breweries all contribute to the local economy.”
The tax, blamed for plummeting beer sales as 16 pubs a week close, is due to last until 2014/15. Up to 5,800 pubs have closed since its introduction four years ago as pints became more expensive, the Commons heard.
“The key point is that beer duty is simply absorbed by the big supermarkets,” Mr Mulholland said.
“They do not need to pass it on. They do not even have to make a profit from beer. Indeed, they have been shown to be selling irresponsibly at a loss.
“The escalator simply makes no sense in terms of the Government’s own agenda, because it pushes people away from drinking in the sociable, controlled environment of the pubs and social clubs around the country, and encourages them to drink at home.
“Beer is now 10 times more expensive in pubs than in supermarkets.”
MPs backed a motion calling for an urgent review of the impact of the policy, ahead of the next Budget in March 2013
But Economic Secretary Sajid Javid insisted the Treasury could not afford to ditch the duty without hiking taxes elsewhere.
Mr Javid claimed if the escalator was axed, the Treasury would need to find another £35m in taxes or spending cuts.
But he did tell the Commons: “We regularly monitor alcohol duties to make sure we are on top of the impact on industry and consumers.”