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WRITER, CONSULTANT AND BROADCASTER SPECIALISING IN BEER, PUBS AND CIDER. BEER WRITER OF THE YEAR 2009 AND 2012

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Wednesday, 23 March 2011

Chancellor punches beer and pubs in the face with one hand - but gives us a clever gift with the other

I have no plans to kick this oleaginous, deceitful, dishonest, callous multi-millionaire (inherited) repeatedly in the face*


Today's budget has been called many things. 'A budget for growth'. A 'tax cutting budget'. It comes one week after David Cameron promised to 'remove all obstacles to growth' from small businesses.  You know, businesses like, ooh, craft breweries.  Or pubs.

So it's pretty repulsive that in what is indeed being hailed by the media as a budget for growth, George Gideon Osborne hit beer with a whopping 7.2% tax increase, bringing the total increase in VAT and duty on beer to a whopping 32.4% since October 2008.

"Whoa, hang on there, Pete!"  I hear you saying.  "I've been watching the budget, and Osborne specifically said that beer tax wasn't going up."

Did he?

Oh yes, he must have done.  Look, the Guardian says "No change to rates of alcohol duty."   The BBC confirms this in its coverage, categorically stating that the chancellor "froze alcohol duties."

That must mean alcohol duty didn't go up, right?  There is no other possible meaning of the words being reported right there.

Wrong.

What Osborne actually said was there would be "no additional rise" in alcohol duty.

No additional rise.  But that means it's not going up, surely!  Well, that's what it means to any casual observer.  The man in the street.  In fact, anyone who does not have a thorough working knowledge of treasury tax plans in relation to the brewing industry.

If you DO know those plans (and if you don't work in beer or pubs, there's no reason you should), you will know that Labour instigated a 'beer duty escalator' of inflation plus 2% every year, and that one of the first things Osborne did on coming to power was to extend this so that it happens every year until 2014.  So when Osborne says there are no additional rises, he means no rises in addition to the 7.2% he was already planning to slap on.  

See what he did there?  

By saying he was only going to increase tax by the amount he planned to increase tax by, that is, by saying he isn't going to implement any tax rises on top of the tax rises he was already planning to implement, he's conned everyone - including intelligent, major, reputable news outlets - into thinking he hasn't increased taxes at all.

If you didn't know about the duty escalator, you would have no idea what he'd just done.

True, he's only applying the tax increases Labour would have done.  But at least Labour told us honestly and clearly that they were shafting us, and how much by.

So it's a tragedy for everyone really.  Pubs will close because of this.  Jobs will be lost because of it.  The price of a pint will go up 10p because of it.  And the most stupid part is, the effect it will have on demand means that the treasury will actually make less money because of it.  Stupid beyond belief.

But while we lick our wounds over this latest battering, we should reflect on the marvellous gift Osborne has given us with this new piece of spin, a greasy deceit that even Malcolm Tucker would applaud.

Because we can all take this same linguistic construct, this same extreme economy with the truth, and use it in our every days lives.

Say, for example, that I haven't had anything to drink for five days, and tonight I plan to go out and drink ten pints and get rat-arsed.  If you ask me, "Are you going to have another night off the beer tonight?" I can simply reply, "My plans relating to drink tonight remain unchanged.  I won't be drinking any additional beer." Unless you know I was already planning to drink ten pints (and you won't, because I haven't told you) you'll think I'm not going to drink.  Hah! But the joke is on you, because I am!

Here's another one.  I'm very angry with George Osborne, even angrier now than when I first saw his pompous, arrogant little face sneering down at the rest of us while he rubbed his multi-million pound inheritance all over his pasty white doughy skin.  I have always thought that if I ever met him, I would kick him repeatedly in the face.  

But you don't know that.  

So, say I was invited to a Parliamentary Beer Group function at which he was going to be a guest, and someone took me to one side and said, "Pete, we know you're very angry with Mr Osborne about his wilful deception and deliberate misleading of the media and the British people over beer duty increases.  You're not hoping to kick him repeatedly in the face or anything are you?"  

I could in all honesty reply, "The way that upper class, over-privileged, callous, pig-ignorant dickhead misled the nation over alcohol duty has not increased the likelihood of me kicking him repeatedly in the face.  Not one bit.  I have no additional plans to kick him in the face repeatedly."  And unless you were listening very, very carefully, you'd think I meant I wasn't planning on kicking him repeatedly in the face.  

It's brilliant!

I'm going to use it all the time from now on.


*Or rather, what I mean is, the plans I have to do so have not changed.

25 comments:

Curmudgeon said...

The budget document clearly says:

"Alcohol duty rates – As first announced at Budget 2008, alcohol duty rates will increase by 2 per cent above the RPI on 28 March 2011. This will add 4 pence to the price of a pint of beer, 15 pence to the price of a bottle of wine, and 54 pence to the price of a bottle of spirits."

So, if you had any interest in the subject, you'd have to be pretty thick to miss that.

Your reaction is a tad over the top, I think.

stephanos_lemon said...

I like what you tagged it as. More people need to know that twatheads real name

Get to the pub.com said...

I have no plans to hail this post as brilliantly clear and insightful, or at least no more than I did just after I'd finished reading it.

Steve said...

This saddens me to see the UK government continuing to increase the tax on small brewers and pubs.

In the states, we have been working relentlessly to get them to lower our tax rates per barrel and currently enjoy one of the lowest global tax rates per barrel. This has had an obvious bonus to growth as the US is now home to 1700+ craft breweries and growing. This is the largest number since pre-prohibition.

This translates to more jobs, more tax dollars and a more robust economy.

Why is it so difficult for government to understand the benefits of promoting small business?

Pete Brown said...

No, Mudgie, it's not. because people DON'T read budget documents. They read newspapers and websites. And the newspapers and websites are saying duty has NOT increased. Or at least, they were when it was announced in such a misleading fashion. That's what people now think.

Ketsbaia said...

Where do you get 7.2% from? I thought inflation was 4.4%, so by my reckoning, that's a 'mere' 6.4% rise.

Still disgraceful and Osbourne was being entirely disingenuous when he said there was no additional increase. I'm entering the spirit by trusting him no less than I used to.

Anonymous said...

lets be honest no one reads budget document even most jernalists will have only listened to the speach, personally i picked up on the word additional and smelt a rat but had no idea of details till i read this.

mudskipperbeerlife said...

I don't see the problem. It's not like beer is being unduly punished by blanket opinions of poorer quality lagers and actually decent beer..... oh...
at least pubs aren't closing at a rate of 29...oh...
well it's not like pubs were a place to socialise or a great cultural aspect of our country....ah

Jeff Pickthall said...

Thanks Pete, my inner class warrior needed a boost.

Mr G. said...

I'd read the news and been misled, so thanks for the clarification.

Tandleman said...

So clear this up for me. How do we get to 10p a pint increase?

Curmudgeon said...

Pete - I heard them say on Radio Five Live that alcohol duties had been "frozen" so I accept you do have a good point. Several people had to text in to correct them.

Curmudgeon said...

"How do we get to 10p a pint increase?"

Gross Margin, innit? A 4p per pint increase in duty and VAT is doubled up to 8p to maintain the pub's GM percentage, and then rounded up to 10p. Short-term sense, long-term death.

Eddie said...

Blame Brown and Labour for the escalator. They introduced it. Thanks to that bunch UK plc is up shtcreek and so obviously luxuries will be taxed. A sense of perspective is needed. I doubt if craft brew drinkers will even notice such a modest increase. If breweries and pubs fail it is more likely due to their 'offer' i.e. Uninteresting beer in unpleasant pubs than a couple of quid on a firkin. Beer is still cheaper in the UK that Eu or USA if you calculate like for like ABV and volume.

Martin - Elland Brewery said...

As a brewery director I have spoken with several other brewers and landlords after the budget this afternoon and none of us can believe what happened today. Yes we expected something (we usually get stung) but after all the hard work of SIBA, CAMRA and other organisations explaining the importance of the breweries and the pubs for the government revenue we did not expect the 6% rise. As always the pub customer reads 4p on a pint but on monday they go into the pub and its gone up 10p so they think (as they don't understand GP's) that the landlord is taking the mick by putting an extra 6p on for themselves when this is not the case. Also why change it on sunday? as a result every brewery has 2 duty returns to do as well as re-print price lists & inform all there customers of the price change and all before sunday and yes I will join the "Kicking in the face " line but won't tell anyone so i can get away with it......

Tandleman said...

Mudgie. Funnily enough I knew that. Short term in the extreme and each time it just makes things worse. It is cumulative and daft.

Eddie said...

Angry beyond belief, though we knew it was coming. And to skip over it like that added insult to injury.

The Germans won't accept anyting other than nominal duty on beer - it's about bloody time we took a leaf out their book.

Stono said...

personally I think we should respond to this stuff apolitically, Labour did pull the same trick for many years in the budget on car tax, airport tax, the pre-budget report for years hid april tax rises which the chancellor didnt have to repeat in the main budget and Diane Abbott (Labour shadow health minister) was this week encouraging the government to go further on the increase on beer tax with such soundbites like "It is wrong that very young children can get out of their skulls for less money than it takes to buy a bottle of coca cola"

I would say Id love to know where she buys her beer from then, but then we all know the nice public subsidised House of Commons bars open all hours arent quite in the same price bracket that the rest of us have to put with.

but we shouldnt be making this about personalities, its the beer duty escalator policy and policy on beer tax and the pub trade thats wrong and we need to concentrate on getting politicians of all parties to properly understand the harm it does

Tandleman said...

"As always the pub customer reads 4p on a pint but on monday they go into the pub and its gone up 10p so they think (as they don't understand GP's) that the landlord is taking the mick by putting an extra 6p on for themselves when this is not the case."

Umm. It is the case when you think about it. Trade Unions used to defend differentials in much the same way.

Phil said...

Or there's the Albertos' born-again country song, where the chorus begins
"Since I found Jesus,
I don't smoke dope no more"

By the end of the song it's turned into

"Since I found Jesus,
I don't smoke dope no more -
But I ain't gonna smoke it any less either!"

Tom Mann said...

So, if the tax rise on a pint is 4p, why do I have to pay 10p more a pint? If you mean protecting gross profits % margins, then is that extra 6p goin g to the landlord or brewer? Why not put the price up by the tax? When tax goes up a penny a litre on fuel, the pump price increases by, wowsers, a penny a litre. Why does beer work differently?

Anonymous said...

Pete, are you jealous of Little George's inheritance?

cheers,
DeGarre

Pete Brown said...

Jealous, deGarre?

Not at all. Funny how some people seem to think any criticism of unearned privilege equates to wishing we had that privilege.

No, my problem with Little Gideon's inheritance is that he has never had to work, has never had to worry about money or budgeting on one single day in his life, has led a closeted, over-privileged existence, and now he's in charge of telling the UK how we have to cut back, rein in, cut down, economise, while he and his banker mates suffer not one iota of the discomfort the rest of the nation must endure. I think he is unfit to be chancellor. Simple as that.

Jonathan Harley said...

@Ketsbaia, the RPI is 5.5% so duty rates will go up by 7.5%. (I think you are confusing RPI with CPI.) This will add 4p to the duty to be paid on each pint, which pubs will presumably wish to pass on to consumers in order to keep their profit margins the same.

In October, beer above 7.5% abv will get a further increase of 25% over the duty of ordinary strength beer, adding a further 25p to the duty on a can of Special Brew.

Buster, Brewer of Brecon said...

4p on a pint - probaly the most misleading way of describing a tax increase...

Beer duty is paid on hl% of alcohol (ie for ever 100 litres (1 hl) of a 3.7% abv beer I make, this equates to 3.7 hl%, on which we pay Duty at a rate of (now)£18.57. This works out at £28.17 for a 9 gallon firkin, or if you prefer just over 39p per pint. This increase works out at £1.90 per firkin or 2.64p per pint. For a 5% abv beer, its now £38.07 per firkin (53p per pint), and increase of £2.56 per firkin or 3.56p per pint.
Hmmm. not going according to plan this... 4p per pint doesn't come in until 5.6% abv...
But of course, the bloody VAT... so we're lookng for an incrase of £2.40 per fikin plus VAT - 4.7% abv, well just under actually...

Confused yet?

The other thing to add in are the the increases in the Brewers' costs of production - fuel, wages, other taxes, insurance, etc - all up year on year. Realistically, and personally speaking, (says he covering his arse leagally!) I'd expect the average increase in firkin to be in the region of £4-£5, which is 9p on a pint before any increase in the landlord's margin. Given the fact that no one wants to faff around with copper coins, that's least 10p by the time we get to the pumps.

Oh, and less money for the Treasury at the end of it. Marvellous