Beer drinkers and drivers get welcome cheer

Mr Osborne scrapped the beer duty ‘escalator’ first introduced by the last Government five years ago and cut the current level of tax on beer by 1p.

Smiling, the Chancellor told the Commons: “We’re taking a penny off a pint.

“The cut will take effect this Sunday night and I expect it to be passed on in full to customers.”

The beer duty escalator meant the tax on beer automatically rose by two per cent over inflation.

It has been the target of a sustained campaign calling for its scrapping because of the impact on consumers and pubs.

Leeds North West MP Greg Mulholland, chairman of the All Party Parliamentary Save the Pub Group and a leading voice in the campaign, said: “It has been evident to see that as a result of the reduced duty under the Small Breweries Relief we now have a thriving brewing industry, with over 1,000 breweries in the UK, the most the UK has seen for over 70 years.

“This clearly shows that lower duty leads to growth, investment and jobs in the brewing sector and I am delighted that the Chancellor has today made a vote of confidence in Britain’s breweries.

“It is also good news for pubs, as supermarkets were able to absorb the increase in the price of beer, pubs were simply not able to and this was further increasing the difference between a can in the supermarket and a pint in the pub, which is a controlled and sociable environment.

“It is now essential that the benefit of scrapping the escalator are passed on to pubs, so we now want to hear from all the large pub-owning companies that they pass this on to licensees by looking at their own prices lists which will help publicans and help pub customers.”

The move was also welcomed by the region’s brewery industry.

Simon Theakston, executive director of Masham brewer T&R Theakston, said: “This is absolutely brilliant news. I never thought I would see the day when I would be actually pleased by a Chancellor’s announcement about beer duty. By cutting the beer tax, he has given a massive boost to job prospects in Britain’s pubs at a time when it is most needed.

“In also abolishing the beer tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s’ beer the most heavily taxed in Europe. It will protect thousands of jobs this year, and will allow us to create many new jobs in one of the country’s proudest home-grown industries.”

In a widely expected move, the Chancellor also decided to cancel an increase in the duty on fuel that would have taken effect in September.

The Government has frozen fuel duty for the past two years, a move the Chancellor said was now saving consumers £7 every time they fill a family car.

“Of course, freezing petrol duty and cutting beer duty will not transform the finances of any family. But it helps a little to have some bills that aren’t going up,” he said.

The rise would have put around 3p a litre on to the price of petrol and diesel at the pumps.

FairFuelUK campaign spokesman Quentin Willson said: “This is welcome news for families and businesses across the UK as far as it goes.

“It is a sign that the Government is listening, but there will be widespread disappointment that the cancellation of this duty rise gives them no immediate relief from climbing fuel prices.

“Cancelling a rise that really shouldn’t happen is not enough. The Government needs to cut duty substantially to get the economic growth we all need.”

AA president Edmund King said; “A September fuel duty hike would have been the last straw likely to break UK drivers’ budgets and would have led to a summer of discontent.

“The scrapping is a pragmatic move and will bring some relief at the pumps. Already 76 per cent of AA members are cutting back on journeys, household expenditure or both, due to the high cost of fuel.”

But the move was criticised as short-term thinking by environmental campaigners.

Friends of the Earth economics campaigner David Powell said: “The Chancellor’s refusal to raise fuel duty in line with inflation has deprived Treasury coffers of £5bn in the last two years, leaving other parts of the economy to pay the price.

“The driving force behind rising petrol prices is the soaring cost of oil. The sensible long-term plan is to protect motorists from rising fuel prices by weaning our transport system off its oil dependency.”