Federation of Small Businesses – Dave's Bankside Babble

A student working as a barmaid in a British pub. — Job loss looming?

Ahead of today’s budget the Campaign for Real Ale produced a short film (see below), to highlight the likely impacts upon pubs, given the successive increases in beer tax over recent years. Beer tax has increased by 26% since 2008 and is set to increase by another 7%, which is expected to put another 10p on the price of a pint in the pub.

In Osborne’s Budget ‘to fuel growth’ at the BBC the summary says… “No additional changes to alcohol duty rates” yet the industry is up in arms. Why is this?

Trade reaction to the Budget – Morning Advertiser: “It is incredible to consider that Britain’s beer drinkers are forced to endure the second highest rate of beer tax in Europe, particularly when the Prime Minister promised a “pub friendly Government” with the pub at the heart of the Big Society,” said CAMRA chief executive Mike Benner.

The reason for the hike in beer prices is due to HM Treasury retaining the much maligned Beer Tax Escalator…

Eat out Magazine: Hospitality industry fuming as beer tax escalator remains in place, sending the price of a pint soaring… (Read more)

The Chancellor said that his Budget (download Budget overview) would be a ‘Budget for Growth’ and in part that is what we have however, as the Federation of Small Businesses (FSB) points out; there are vital components still missing for small firms to create jobs…

“We are pleased that the Chancellor has introduced a fuel duty stabiliser, has committed to cutting fuel duty and has introduced 21 new Enterprise Zones. This will provide much-needed stability for struggling small businesses… (John Walker, National Chairman, FSB)

So it will be cheaper to run our vehicles (marginally) but more expensive to refuel our personal tanks… All this at a time when most of us already have less disposable income.

For some time now I have been an advocate of adopting similar alcohol sales laws to those in place in some States of the USA. For example, the alcohol laws of Oklahoma limit and regulate the sale of alcohol. Any beverage containing more than 4% abv, which includes most spirits, wines and stronger beer, may only be sold in licensed liquor stores i.e ‘off licences’.

Given that our government are now imposing revenue levels based upon beer strength, and the fact the loss-leader marketing methods of major retailers are severely impacting upon the pub trade, perhaps implement similar sales laws and taxing processes in the UK would realise benefits for all? Or, perhaps we should all now consider drinking petrol instead of beer? Just joking however, beer drinkers will find their tipple of choice far harder to swallow after the budget.

The knock on negative impacts right across the industry will undoubtedly be a bitter pill to swallow. Although some have suggested there may be a greater impact upon the large pub companies and industrial brewers, who in any case may well be able to weather the storm, there could actually be some very minor advantages to the non tied trade and micro-brewing industry? That said, get set for further pub closures, small business failures and increasing unemployment!