Pub landlords in Lancashire have welcomed the 1p reduction in the price of beer announced in the Budget.
Stan Eaton, who runs the Old Black Bull on Friargate, Preston, said he believed the one per cent reduction in duty on a pint coupled with the scrapping of a tax escalator was good news for the industry.
He also welcomed the scrapping of the planned 13p increase in the price of a litre of fuel which had been set to kick in from September, announced by the Chancellor on Wednesday.
Mr Eaton said: “People have a very limited amount of money to spend these days and anything which puts more money in their pockets has to be a good thing.
“There is always more that can be done but I was just pleased that things did not go up.”
He said the decision to scrap the proposed rise in fuel taxes would also boost publicans by reducing the cost of breweries transporting beer to and from pubs.
Malcolm Ireland, head of leisure and licensing at Preston-based law firm Napthens, said the axing of the escalator would help stem the rate of pub closures.
He said the increase added 6p onto the cost of a pint.
The expert added: “Since the beer duty escalator was introduced in 2008, it resulted in beer duty being automatically increased by two per cent above inflation every year.
“Effectively tax on beer has increased by a staggering 42 per cent since its introduction meaning a third of a price of a pint is tax.
“This undoubtedly has had a damaging effect on the brewing and pub industry that contributes approximately £21 billion to UK GDP.
“The beer escalator has been strangling growth in this industry, and has contributed to the frightening rate of pub closures as the industry contends with the recession.”
But, landlord Graham Rowson, of the Black Horse on Friargate, Preston, described the move as “not even a sticking plaster on an open wound.”
He said he would have preferred to see the Chancellor do more to tackle the rise in other bills.
Mr Rowson said: “It is things like £700 electricity bills, VAT bills and the cost of heating pubs which really kills them, not a penny off a pint.
“Anything is better than nothing but I cannot see it making a difference.”
George Osborne told MPs on Wednesday that 10,000 pubs have closed in the past decade.
Duty on alcohol will not be cut, but the Chancellor said the beer duty escalator will be scrapped, preventing a 3p rise this year.
Mr Osborne drew cheers from MPs when he said he intended to go further, by cutting beer duty 1p from Sunday evening.
Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “This is absolutely brilliant news, and it will make George Osborne the toast of Britain’s pubs today. By cutting the tax on beer, he has moved to boost jobs in Britain’s pubs at a time when it is most needed.
“In also abolishing the beer tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s beer the most heavily taxed in Europe.
“This will protect thousands of jobs this year, and will allow us to create many new jobs in this brilliant industry.
“I want to pay tribute to the hundreds of thousands of people who have supported this campaign. This has been a broad and persuasive campaign uniting the industry and consumers. I hope this heralds the start of a long-term change that recognises the benefits of beer and pubs, for the economy, and for society.”
Mike Benner, chief executive of Camra, said: “This is a momentous day for Britain’s beer drinkers, who will tonight be raising a glass to the Chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers. This decision will keep the lid on the cost of a pint down the pub.
“Since the duty escalator was introduced in 2008, 5,800 pubs have been forced to call last orders for good. What could have been the final nail in the coffin for our pubs has been decisively avoided by the Chancellor in a move that will spark celebration in pubs across the UK.
“Scrapping the beer duty escalator, combined with a 1p cut, is a massive vote of confidence in British pubs and will lead to an increase in pub going and more money in the Chancellor’s coffers.
“Today’s decision is a huge triumph for Camra’s pub campaigners who have been building overwhelming public support for a fair deal for beer and pubs, pub by pub and beer festival by beer festival.”
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