Chancellor raises alcohol duty by 2% but pledges to help businesses

By Emma Eversham

- Last updated on GMT

Related tags: Investment, Alcoholic beverage, Chancellor

Chancellor raises alcohol duty by 2% but pledges to help businesses
Chancellor Alistair Darling ignores pleas from the pub industry not to increase alcohol duty in this years Budget, but announces measures to help businesses

Pub and drinks trade associations have blasted the Chancellor`s plans to increase alcohol duty by 2 per cent.

In today`s Budget speech Alistair Darling said he would continue with his alcohol duty escalator, raising duty by 2 per cent from midnight and ignoring pleas from the industry not to.

The British Beer and Pub Association said Darling`s decision had effectively `signed the death warrant` for thousands of Britain’s pubs. 

“Pubs play a vital role in the economy and in local communities. Yet six are closing every day and more than 2,000 have gone in the last 12 months alone. The Chancellor’s unfair and unjustified announcement today condemns thousands more to shut for good," said a BBPA spokesman.

Nick Bish, chief executive of the Association of Licensed Multiple Retailers, criticised the Chancellor for saving other industries at the expense of the drinks industry. 

“The Chancellor has already spent 3.5 per cent of GDP on bailing out the banks, £2bn to save the car industry, but he appears to baulk at investing in pubs and bars. Now we have investment in ‘green collar’ jobs and ‘low carbon’ technologies. The Chancellor must beware – all the glitters is not gold and it is questionable whether these new, sexy industries will deliver lasting growth.

"We know that investment in pubs and bars is a solid and reliable one. We know that we can generate sustainable growth as well as real jobs when the economy finally takes off. The Great British Pub is a national asset.  Pubs bring local communities together and create thousands of jobs. They also pay a great deal of tax.  It is about time that Mr Darling recognised a pub taxed into closure soon pays no tax at all.”

Despite the alcohol duty rise, the Chancellor did pledge to help businesses in general through the downturn, allowing loss-making companies to reclaim taxes on profits made in the last three years.

He said: "This help, which will lead on average to repayments worth £4,000 each year, will now be available for two years until November 2010. Well over 100,000 businesses will have their full current losses wiped out."

He also said the government would invest £260m in training and subsidies for young people `to help them get the skills or experience needed in sectors with strong future demand`.

A spokesman for the British Hospitality Association said although measures to help move the country out of the recession were welcome, Darling had actually paid little attention to the hospitality industry in this year`s Budget. 

He said: "Measures to get more young people into work or training could have a beneficial impact on employment and doubling - for one year only - the main capital allowance rate to 40 per cent - could have a short-term benefit - but investment in the industry is essentially long-term and the Hotel Buildings Allowance is not restored. Tourism - one of the biggest sectors in the UK economy employing over two million people and one that offers huge jobs potential - never got a mention even though other industries did." 

Beer tax rises threaten 60,000 pub jobs

Related topics: Legislation

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