The Rt Hon Phillip Hammond MP

Chancellor of the Exchequer

13^th September 2018

Dear Phillip,  

I am writing to you about the Government’s planned increase in Beer Duty and the effect on British pubs across the country. Higher rates of tax on beer could lead to more pubs closures and that will have a negative impact on the beer and pub industry.

This industry generates £23bn towards UK GDP each year and support 900,000 jobs across the country. As it stands, for each pint sold, a third of the price currently goes towards paying taxes, namely VAT, Beer Duty, and Business Rates. Increasing Beer Duty by 2p per pint will subject the industry, which includes many small, locally owned pubs and breweries, to a further and unsustainable financial squeeze. The UK has one of the highest Beer Duty rates in the EU, paying 40% of all Beer Duty in the EU whilst only consuming 12% of its beer. British Beer Duty is almost 12 times higher than some other European countries and 10 times more than Germany, a country that has the highest rates of production and consumption per capita in the EU.

According to a poll by YouGov, pubs are current closing at a rate of 18 per week. This means loss of income for the Treasury and represents a real loss for our local communities. Pubs act as social hubs in many places across the country, helping to connect individuals and provide a sense of community amongst residents. They are also a valuable part of our national tourism sector. Villages, towns and cities will only suffer if more pubs have no choice but to close their doors. When 7 out of 10 alcoholic drinks purchased in pubs are beer, putting up Beer Duty has a very immediate and significant impact.

Moreover, 40% of pub employees are 16-24 years old. The pub industry provides a vital opportunity for young people to get into work. Increasing Beer Duty rates and jeopardising the future of local pubs will disproportionately affect young people working in the sector - at a time when Brexit and the ongoing economic situation is already taking its toll. 

As you make your plans for the Autumn Budget, you are in a position to help provide a break for these businesses, allowing them, and in turn their communities, to prosper; benefitting local people, young workers, and the economy as a whole. I urge you to reconsider the proposed Beer Duty increase and instead help the good old British pub to thrive.

I look forward to your response.

Yours sincerely,