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A tax on happiness?

Max Kassam asks if the UK's high tax on beer does more harm than good

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Photocredit: Squaregraph
Photocredit: Squaregraph


Recent figures published by The British Beer and Pub Association show that the North of England pays more beer tax than the entire Czech Republic, widely regarded as the biggest drinking nation.

In Britain, beer is not only a drink, but a culture. The pub is where people take solace after work, where students spend the majority of their waking hours, and where groups gather to enthrall over a Super Sunday of football. This great social hub may be slipping away from us, with the beer duty escalator threatening to make this delightfully comforting past-time simply not affordable to students. Introduced by the last government back in 2008 and continued by the coalition, the tax increases the cost of a pint by 2% every year above inflation. As a result, tax on beer has gone up by over 40% since 2008, with consumers paying over a third of a pint on tax.

With the current state of the economy combined with consistent levels of high inflation, the price of a pint has risen considerably. One reaction to the tax can be seen by John Smith's, who have opted to simultaneously reduce the alcohol content and raise the price - the alcohol percentage will fall from 3.8% to 3.6%, while the price will rise by 2.5p. Heineken, the owner of the brand, claim that this move is merely in line with that of other leading brands such as Tetley's. However, it also happens to save them around £6.5m annually. The prices we are now being faced with are enough to make you look away in disgust, with 6,000 pubs being closed in the past four years.

Not only is this tax ripping into our pockets, Charlotte Leslie, Conservative MP, described it as 'ripping the heart out of communities'. The beer tax will see the Treasury reeling in around £9bn each year, at the expense of an industry which is a pivotal employer for young people.

Indeed, Wetherspoons have recently announced that they are chain planning to open 30 more pubs in 2013 and in doing so, create 1,200 more jobs. However all round, it just seems to taste a bit bitter.

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