According to the Campaign for Real Ale (CAMRA), Alistair Darling has done nothing to help an important local industry that is struggling to survive. The organisation says pub-goers are unlikely to see any benefit from the 2.5 per cent VAT cut because of an eight per cent increase in alcohol duty. On top of the 10 per cent increase added in last March’s budget, the news comes as a bitter blow to struggling pubs, which are already closing at a rate of around 36 per week across the country.
A CAMRA spokesman said: “The situation is being made worse by the impact of the wider economic slowdown, and the Chancellor’s announcement of yet another increase in duty this week – on top of plans to increase the tax on beer above inflation next year and for the next three years. With tax already taking up a third of the price of a pint of beer, further hikes can only accelerate the decline of the pub.”
Frome pub The Griffin is run in conjunction with on-site brewery Milk Street Brewery. Head brewer Rik Lyall described Mr Darling’s move as “a complete disaster for community pubs”. He explained that most pub owners are already struggling to make ends meets, as the blow follows setbacks including the smoking ban, unregulated competition from supermarkets and the spiralling cost of hops and malt after two dismal harvests.
“It is very unfair of the Chancellor to get publicans to pay for the decrease in VAT. Our beer duty is already the highest in Europe. Some places will soon have to charge around £3 per pint just to make ends meet. The Griffin is doing all right but we have to work harder than ever to survive in this industry. The Chancellor has put the last nail in the coffin for a lot of people. He obviously doesn’t want there to be any character pubs left, and there won’t be.”
Wiltshire brewery Wadworth is based in Devizes and has around 260 pubs from Somerset to Berkshire. Paul Sullivan of Wadworth described the pre budget report as “very disappointing. All industries thought they would benefit from the cut in VAT but the chancellor has taken that away from pubs,” he said. “Things look dismal for our trade. Factors like the economic downturn, increasing red tape for pubs, the smoking ban, and the cost of food and energy are taking their toll – you could describe it as a perfect storm – and it will get worse when VAT goes up again.”
Mathew Manning