UK’s beer duty escalator scrapped

Chancellor George Osborne has scrapped the UK’s beer duty escalator that saw tax on beer rise at a rate of 2% above inflation each year, but spirit duty will continue to rise.

Announcing the highly anticipated move in the budget, Osborne further revealed the Government would also cut beer duty by 1p as of Sunday 24 March.

However there was no such measure for the UK’s wine and spirits, which will continue on with the duty escalator “as previously announced”.

Brigid Simmonds, the chief executive of 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.”

However a spokesperson for Diageo said the decision to continue with the duty escalator on spirits was risking the success of the spirits industry.

“This move is disappointing. Cutting duty on beer while increasing it on spirits punishes the UK spirits industry for its success in this harsh economic climate. Scotch is the UK’s biggest food and drink export. This move risks that success.”

Separately the Chancellor also confirmed that the Government is continuing to investigate how best to deal with cheap and heavily discounted alcohol, adding that “responsible drinkers should not pay the price”.