George Osborne is the toast of beer drinkers up and down the land today, after announcing he was scrapping the beer duty escalator and cutting 1p from the price of a pint in today’s Budget.
But wine and whisky drinkers will be glowering into their glasses: the chancellor has switched off the duty escalator for beer, but not for wine and spirits, which will still go up by two percent above inflation.
It doesn’t make sense to single out beer, cry some; notably the WSTA’s Miles Beale. Meanwhile, others calculate the cut in beer duty will cost the government £1bn over the next five years. Not exactly - ahem - small beer.
So why the cut? Has the chancellor outed himself as a real ale fan? Is he keen to protect jobs in the brewery trade, as he hinted in his speech? Or does he want to safeguard the British pub? Ten thousand of them closed in the last decade, George informed us.
Kevan Mulcahey, at Kantar Worldpanel, thinks it’s simply the case that the beer lobby has been more vocal in its objections to the duty escalator. He doesn’t think cutting the price of beer will halt its decline in popularity, or do much to stop the erosion of our pubs. “The decline in beer consumption has been going on for seven or eight years, and the move to drinking at home is not a new phenomenon. It was happening before the beer escalator,” he says.
Many of the forecasts around this Budget were gloomy. And, indeed, in this regard the chancellor delivered once again: growth is still worse than thought, more savings need to be made, and debt remains heavy around our necks.
At the end of the day gloom is dispelled by cheer, and what better way to deliver it than in a headline-friendly cut on the price of a pint? (Well, cancelling a rise in fuel duty might do it.) Moreover, for the wine and spirits fans, there’s hope that stopping one escalator may set a precedent for eventually stopping the rest. Now that’s something we can all drink to.
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