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Minister defends tax levied on our beer

Tuesday 3rd July 2012 (Andrew Griffiths)

TAX levied on beer in Britain is not an ‘overwhelming or unreasonable amount’, a Government minister has told MPs.

Treasury Secretary Chloe Smith made the claim during a late-night House of Commons debate, attended by Burton and South Derbyshire MPs Andrew Griffiths and Heather Wheeler.

Miss Smith was asked by backbenchers why the Government continued to increase tax on brewers each year through the beer duty escalator.

The escalator was introduced by the Labour government in 2008 and has seen beer duty rise by 40 per cent since. Currently 47p of the cost of a pint of beer is paid in duty.

Critics argue this high level of tax has driven drinkers away from beer and damaged the industry.

Mr Griffiths, chairman of the parliamentary beer group, told MPs during the debate brewers were paying half their income in tax to the Treasury at a time when the industry’s future was at a ‘critical point’.

He added: “We can save jobs and pubs if we cut the duty on beer.” Mrs Wheeler told Commons: “Many pubs in South Derbyshire are still under threat or are going to close.

“We are trying to do our best but the yoke of taxation is too high.” The Burton Bridge Brewery in Bridge Street, Burton, The John Thompson Inn and Brewery in Ingleby and the Brick- makers Arms in Newton Solney were singled out by Mrs Wheeler in her speech as ‘fantastic’.

But Miss Smith said the Government would lose £35 million next year and £70 million the following year if the escalator, which increases beer duty each spring by the rate of inflation plus two per cent, was cancelled.

She told MPs: “On the price of a beer, I point out that the pre-announced alcohol duty increases in question added only 3p to a pint of average-strength beer, including VAT.

“The total duty on a pint of beer is now 47p. I think that honourable members will agree that, especially as alcohol consumption does after all carry its own costs and concerns, that addition in the Budget this year is not an overwhelming or unreasonable amount.”

Miss Smith also said imposing minimum prices per unit of alcohol sold in supermarkets would help pubs compete.

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