UK: Up to 60,000 jobs – about a tenth of the total workforce - will be lost across the beer and pub industry over the next five years if planned beer tax increases go ahead in the Budget in two weeks’ time, according to the British Beer & Pub Association.
In a report, “People, pubs and Parliament: A new deal for Britain’s beer and pub sector”, the BBPA describes the current economic climate as among “the toughest trading conditions in living memory” - and calls on the Chancellor to rethink plans set out 12 months ago to impose a “punitive” tax escalator for the next four years.
The report outlines the “severe and sustained” pressures facing an industry that employs 600,000 people and supports a further 550,000 jobs in the UK, generating an estimated £28 billion in economic activity. Key statistics include:
- 59,000 jobs are projected to be lost over the next five years [Oxford Economics];
- total beer sales are down 9 million pints a day since 1979. Beer sales in pubs are now at their lowest level since the Great Depression of the 1930s [BBPA];
- the rate of pub closures is accelerating – and now stands at six a day or 39 a week [CGA Strategy/ BBPA]
- beer duty was increased twice during 2008 by a total of 18 per cent - and, even before the planned increases this year, a third of the price of a pint now gets swallowed up in tax;
In the 2008 Budget, the Chancellor said the planned alcohol duty escalator, increasing duty rates by 2 per cent above the rate of inflation each year from 2009 to 2011, was “in order to ensure that alcohol duties keep pace with rising incomes” [Budget Report, March 2008]. Yet the latest official statistics show that while average earnings grew by 4.5% in March 2008, today average earnings are actually falling for the first time since records began, by 0.2% [Labour Market Statistics 2009, ONS]
David Long, the BBPA’s Chief Executive, said: “This report sets out clearly the exceptional pressures the beer and pub industry is facing at this time.
“Twelve months on from the last Budget the economic situation has changed radically. While average earnings were rising by almost five per cent in March last year, today they are actually falling. The Chancellor must now think again.
“Pubs play a vital economic and social role in all parts of the UK, and yet the industry was excluded from the VAT cut in November, is being burdened by more and more regulation, and now faces further tax increases in the Budget. The result will be to write off thousands more pubs and tens of thousands more jobs.”
The BBPA and the Campaign for Real Ale’s “Axe the Beer Tax, Save the Pub” campaign has had a massive public response with 70,000 supporters signing up since the end of last year. Almost 25,000 people have lobbied their MP on the beer tax issue, and 202 MPs – including 97 Labour backbenchers - have signed up in support of the campaign.