Budget sees cut in draught beer duty with aim to encourage return to the bar. Some history
It wasn’t by any means the most important of measures announced in the Budget, but the Chancellor Rishi Sunak announced a series of alcohol duty changes which he said were the biggest for 140 years.
The historical point is correct and not without interest. In 1880 Gladstone changed the way tax on beer was calculated. It moved from being a tax on the ingredients (malt and hops) to the original gravity the beer was brewed at. The Liberal Party were no friends of the brewers- the Beerage were and are Tories- but the effect was to free up brewers to use cheaper ingredients.
The system stayed in place until 1992 when the tax moved to the final gravity of the beer.
Rishi Sunak is still taxing the strength. A lower rate will apply to beers under 3.5% (it was under 3%) which hopefully will promote tasty ‘table beers’ and the like. The higher rate tax will move to 8.5% which will be marginal for most drinkers but could mean that stronger imperial stouts and triple IPAs end up paying the same tax as wine.
Meanwhile to address the gap between buying cans in supermarkets and pub prices the Chancellor has announced a 5% cut in duty for beer & cider served on draught from containers of 40 litres or above. It appears the 40 litres is not in the small print so will no doubt be the subject of future lobbying. Much craft beer is sold in 30 litre containers.
One suspects that this is really aimed at what is left of the Tory supporting Beerage, the large regional brewers, who serve beer in larger casks. Encouraging cask beer drinking in pubs is positive, though setting a divide with ‘craft’ is not.
Rishi Sunak also mentioned changes to the Small Brewers Duty Relief, first introduced by Gordon Brown, which has been the subject of much discussion, and will it seems be looked at separately.
Most of the measures noted above have been the subject of lobbying and campaigning by CAMRA and SIBA.
The headline which is a traditional is that the changes will mean a cut of 3p a pint at the bar. One wonders what historic file a Treasury Civil Servant dusts off to find such line. When I started drinking beer 50 years ago, a pint of standard bitter was around 12-14p a pint and didn’t vary much across pubs and didn’t change much either. Nowadays beer is much more expensive and there are no standard prices whatsoever, although I can still work out if the price for a beer is somewhat excessive. I doubt given the huge financial impact the pandemic has made if beer prices will be lower, but it might stop them from getting higher.
In summary the Budget reflects some historic interests (of the Tory Party) together with the impact of effective campaigning. Gladstone in 1880 was beset by temperance campaigners and I suspect we’ll be hearing from them too.
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