The Chancellor brought some cheer to the nation’s beer drinkers by scrapping a duty escalator blamed for closing pubs – and going further by cutting duty by 1p – in the Budget today.
The beer industry and campaign groups have been warning the Government that the escalator, which has added 2 per cent to the price of a pint since it was introduced by Labour in 2008, was forcing pubs out of business.
The Campaign for Real Ale gathered more than 100,000 names on a petition which led to a parliamentary debate last year.
Camra pointed out beer duty has risen 42 per cent since 2008, adding that 18 pubs a week are closing.
George Osborne told MPs 10,000 pubs have closed in the past decade.
Duty on alcohol will not be cut, but the Chancellor said the beer duty escalator will be scrapped, preventing a 3p rise this year.
Mr Osborne drew cheers from MPs when he said he intended to go further, by cutting beer duty 1p from Sunday evening.
However, he also painted a gloomy picture for the economy, as the official growth forecast was slashed in half and George Osborne admitted the recovery was taking “longer than anyone hoped”.
He confirmed that September’s planned fuel duty rise has been scrapped.
He said a planned 3p rise in beer duty tax was being scrapped and replaced by a 1p cut on a pint of beer.
And he brought forward a rise in the personal allowance to 2014, meaning no income tax is paid by anyone on the first £10,000 of their earnings.
He also announced a new employment allowance which will take the first £2,000 off employer National Insurance bills for every company in the country – a move he described as ‘taking tax off jobs’.
However, Labour leader Ed Miliband attacked a ‘more of the same’ Budget from a ‘downgraded Chancellor’.
Mr Miliband, MP for Doncaster North, seized on growth forecasts from the Office for Budget Responsibility which had been slashed from 1.2 per cent this year to 0.6 per cent and said ‘Britain deserves better’ than it was getting from the coalition Government.
He said: “Every Budget he comes to this House and things are worse, not better for this country.
“Compared to last year’s Budget: growth last year down, growth this year down, growth next year down, growth in 2015 down.
“All he offers is more of the same: higher borrowing, lower growth ... a more of the same Budget from a downgraded Chancellor.
“Britain deserves better than this.”
Budget at a glance
Income tax threshold to be raised to £10,000 by next year;
Beer duty cut by 1p a pint;
Planned fuel duty rise scrapped;
The first £2,000 to be taken off all employers’ National Insurance bill;
Chancellor George Osborne promises £3 billion for infrastructure;
Economic growth is forecast to be 0.6 per cent this year;
Service personnel to be exempt from public sector 1 per cent pay rise cap;
Public sector net debt will fall by 2017/18, the Office for Budget Responsibility forecasts.