Public demand beer tax freeze as pub closures lose Treasury £242m

Ninety per cent of the British public want beer tax frozen or reduced, after new figures released from the British Beer and Pub Association​ (BBPA) reveal pub closures have cost the Treasury £242m in lost tax revenue.

BBPA analysis shows that each pub pays an average tax bill of £107k a year, 30 per cent of its turnover. But now that the rate of pub closures has reached 39 a week, it is estimated that the Treasury is losing over £4m a week in lost tax revenue.

David Long, chief executive of the BBPA said, “If the Chancellor is trying to maximize tax revenues at this particular time then he will shoot himself in the foot by putting up beer taxes. These figures show that pub closures don’t just mean lost businesses, lost jobs and a loss to the local communities they serve, they are also a loss for the taxman.

“If the Chancellor increases beer taxes as he said he planned to do last March, then he will condemn more pubs to close, put more people out of work and lose even more tax revenue.”

The Chancellor increased beer tax by 18 per cent in 2008 alone, which contributed to the closure of 2,200 pubs​ and the loss of 20,000 industry jobs. Now he is expected to announce further increases in Wednesday’s budget report, following on from last year’s pledge to increase beer tax by two per cent above the rate of inflation for the next four years.

According to a new poll by the Axe the Beer Tax, Save the Pub​ campaign, nine in ten people now believe that the Chancellor should reduce or freeze beer tax, while two-thirds of people believe a further rise in beer tax will lead to the closure of yet more pubs, and ultimately the loss of even more jobs. A worrying 29 per cent of people said they would be less likely to go to the pub if beer taxes did increase.

“The proposed tax escalator was proposed 12 months ago when earnings were rising and the economy was strong,” continued Long. “Today, earnings are falling and consumption of beer in pubs is at its lowest since the Great Depression.

“The budget is just two days away. There are 48 hours to save the pub. Mr Darling must listen to the majority of the public and MPs and recognise that increasing beer tax at this time is wholly unjustified and to do so will be to sign a death warrant for thousands more pubs.”