Friday, 2 November 2012

Going down?

The House of Commons yesterday debated a subject close to the hearts of MP's, and indeed mine: the price of beer.

The beer duty escalator introduced by the Chancellor Alistair Darling in 2008 means that the duty on beer increases every year by two per cent above the rate of inflation. Along with 104,000 others, I signed the CAMRA e-petition that triggered the backbench debate, introduced appropriately by the MP for the brewing town of Burton-on-Trent.

I'm not sure how many MP's normally turn up for these debates but there were quite a few there yesterday, all of them - Tory, Labour and Lib Dem - calling on the Government to scrap the escalator. It makes you wonder who voted for it in the first place.

I'm in favour of scrapping the escalator - and ultimately beer duty and other indirect taxes - but there seems to be an assumption that the beer escalator is the reason pubs are closing and scrapping it would cut the price of a pint.

There are lots of reasons pubs close and lots of factors pushing up the price of beer: VAT, rises in the cost of raw materials and transport and the rents pub companies charge their tenants. I'm not sure how scrapping the escalator would reduce the price of a pint, as opposed to giving brewers a bit of breathing space and possibly holding back further increases. given that most breweries would surely just pocket the money they saved in duty rather than pass on the benefit to their tenants and drinkers.

No comments:

Post a Comment