Beer duty hike would case thousands of job losses

November 04, 2017 12:00 AM

Embargoed until Saturday 4th November at 00:01

Beer duty hike would cause thousands of job losses

  • The beer industry provides nearly 900,000 jobs to the UK.
  • It also contributes £23bn annually to the UK economy.
  • The sector employs high numbers of young people and those in regions with relatively high levels of unemployment.
  • Beer accounts for 70 per cent of drinks sold in pubs.
  • Increases in beer duty lead to pubs shutting down and jobs being lost.
  • People in the UK pay 40 per cent of the beer taxes in the EU, but only drink 12 per cent of the beer.
New research from the TaxPayers' Alliance shows that increases in beer duty will have a huge negative effect on employment in the beer and hospitality sectors, and will cause pubs to shut down across the country
This will particularly hit regions where unemployment is relatively high. Our research shows the number of pubs and jobs in pubs and bars in each region and country matches closely with the employment and unemployment levels of those regions. Therefore, the importance of the beer industry for employment opportunities in regions and countries of the UK with relatively high levels of unemployment is clear.

Commenting on the findings, John O'Connell, Chief Executive at the TaxPayers' Alliance, said:

"We have long argued that high beer duty has a negative effect on jobs in the beer industry, and this research proves it. Every time beer duty has gone up, jobs have been lost, whilst scrapping the beer duty escalator created tens of thousands of jobs. The government should lower beer duty and reap the rewards of more jobs and more tax in the long run from a more thriving economy."

David Wilson, Director of Public Affairs of the British Beer & Pub Association, also comments:
 
“When it comes to creating jobs, beer delivers. Most of the beer consumed in Britain is brewed in Britain, and every job in brewing supports an astonishing 21 extra jobs, 18 of which are in pubs. Lower beer duty is also great news for pubgoers.”

Not only are jobs numbers connected to beer duty, there is also a very strong correlation between increases in beer duty and the decrease in the number of pubs and bars, as the graph below demonstrates. The fall in the number of pubs can be matched closely to hikes in beer duty.

Number of pubs and bars in the UK. 

The tax burden on the beer industry
  • As well as beer duty, there is also excise duty on other alcoholic drinks, corporation tax, business rates, and national insurance contributions that the beer industry has to pay. These costs are passed on to consumers in the form of higher costs.
  • If beer duty increased, we would expect to see sales of beer decrease, and if beer duty decreased, then we could reasonably expect sales to go up.
  • This is exactly what has happened in the past: under the beer duty escalator in 2008-2013, beer duty rose by 42 per cent. During this period 7,000 pubs closed and 58,000 people lost their jobs.
  • Scrapping the beer duty escalator resulted in 21,000 new jobs being created, and lowering beer duty again would likely create even more jobs, helping raise more revenue for the treasury in the process.
 
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contact

James Price
Campaign Manager, TaxPayers' Alliance
james.price@taxpayersalliance.com
24-hour media hotline: 07795 084 113 (no texts)

Notes to editors

1. Founded in 2004 by Matthew Elliott and Andrew Allum, and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, reduce spending and protect taxpayers. Find out more about the TaxPayers' Alliance at www.taxpayersalliance.com

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