The British Beer and Pub Association (BBPA) has revealed research by Oxford Economics showing that a cut to beer duty of 5% would lead to the creation of up to 13,000 jobs.
Cutting beer duty is a central request of the beer and pub industry in the upcoming Budget, along with a cap to the business rates multiplier and a reduction to the VAT charged on non-alcoholic drinks and food served in pubs.
The UK’s beer and pub sector is facing a whirlwind of challenges from all angles. This research comes after the recent news that more than 500 pubs closed their doors for the final time during 2023.
The combination of stubbornly high energy bills, the third highest beer duty in Europe, and a lack of VAT relief for hospitality has forced many to close their doors.
At a time when so many high streets are visibly struggling, pubs are an economic force multiplier in local economies. The industry already supports 936,000 jobs around the UK and contributes £26 billion to the wider economy, while simultaneously generating £15bn in taxes.
The sector’s importance for skills and growth is unequivocal, with 40% of those employed being 18 to 24 years old. This generation of trained young staff are developing vital skills in a flexible industry. The loss of pubs is a loss of skills gained for a generation in need of flexible, well-paid, social work.
Pubs and breweries now face even narrower operating margins, with one in three pounds spent at the pub going in taxes, and 40% of breweries’ turnover being tax. The position for many is unsustainable, which is why setting the optimal fiscal and regulatory framework is critical, says the BBPA.
“It was wonderful to see beer duty frozen once again at the last Autumn Statement, and the introduction of the Brexit pubs guarantee means there will always be less tax on a pint at the pub than the supermarket,” said Alun Cairns MP, chair of the all-party Parliamentary beer group.
“Britain’s pubs and brewers generate so much value for local economies and communities, and it is clear that a cut to beer duty at the Spring Budget can be a driver of economic growth and job creation.”
Emma McClarkin, chief executive of the BBPA, added: “This new research offers proof that a 5% cut to beer duty can deliver vital economic growth up and down the country.
“The chancellor has stated that he is focusing on cutting taxes at the Spring Budget. Now he has the proof that cutting beer duty won’t just affect the cost of a pint, but will deliver vital economic growth and create jobs.”
