Alcohol industry trade bodies have reacted angrily to the Government’s decision to increase alcohol tax, calling the decision a “death warrant” for the on-trade that will cost thousands of jobs.
In today’s Budget (April 22) the Chancellor Alistair Darling announced that alcohol tax would rise 2% from midnight, which will add an estimated 5p to the cost of a pint of beer.
The Beer and Pub Association says the rise is a further “body blow” after the 18% increase in excise last year to an industry which has seen the closure of 2,000 pubs in the last 12 months.
Jeremy Beadles, chief executive of the Wine and Spirit Trade Association, says: “At a time when the Government is offering other industries a helping hand it is extraordinary that it wishes to hurt the drinks industry with further tax increases”.
The on-trade has been under pressure in recent times from cheap supermarket promotions and the economic downturn. The increase also comes a month after the Government’s chief medical officer Sir Liam Donaldson floated plans to impose a minimum price of 50p per unit of alcohol in measures aimed at tackling misuse.
The charity, Alcohol Concern, however praised the Chancellor’s move, adding that there is evidence to prove that higher prices lower consumption, especially among high-risk groups.
Elsewhere, the Chancellor announced he would introduce the widely anticipated car scrappage incentive scheme as part of wider measures to boost the ailing automotive industry.
Car owners will be given a £2,000 discount on a car bought after scrapping their old one if it is more than ten years old.
Paul Williams, chairman of the Retail Motor Industry Federation says: “By opting for a vehicle scrappage scheme in the Budget, the government has taken the opportunity to boost the new car market, while simultaneously helping consumers buy a new car.”
However, the British Retail Consortium says that the budget has done little to boost the retail sector.
Jane Milne, BRC business director, says: “The Budget left retailers still facing most of the people and property costs that will prevent new investment and threaten the viability of retailers and their ability to create and sustain jobs.”