This must be regarded as a major success for the campaign, which managed to put across a wider message about the role of pubs and the brewing industry in British society. However, given that the escalator remains for all other categories of alcoholic drinks, it is something of a triumph of special pleading. To some degree, it is a rebalancing exercise, as during the 1990s and 2000s there was more than one occasion when Ken Clarke and Gordon Brown froze spirits duty while continuing to increase that for beer. But it’s not going to do anything to stop the growing problems of alcohol smuggling and illegal distilling. Whisky and cider are substantial British industries as well as brewing, and they are going to be feeling somewhat badly done to today.
Osborne’s changes have also ended the strict proportionality of the different rates of beer duty that existed before, as the escalator has continued to be applied to the 25% addition for High Strength Beer Duty, and the duty on beers of 2.8% or under has been cut by 6%, not just 2%, so it is now less than half the standard duty. I can’t see that doing much to increase their appeal, as we’ve seen already that a tax break alone cannot create a demand for something for which there wasn’t one before.
It’s a relief, though, that the fears of many including myself that additional duties would be introduced on higher-strength beers and ciders have not been realised.
It’s also important not to see this as any kind of magic bullet for the pub trade. The anti-escalator campaign was at times guilty of overstating the negative impact of the escalator, when in reality there have been many other factors leading to a reduction of trade over the period it has been in force, not least of course the smoking ban. Five years of the escalator will have increased the price of a pint at the bar by maybe 10p. Of course that hasn’t helped, but it alone can’t really have been a make-or-break factor for many pubs.
So, while it might act to somewhat slow the rate of decline, it would be wrong to expect this to be the start of a turnaround as the 1959 cut proved to be.
And I’m awaiting the predictable howls of rage from the anti-drink lobby.