Budget 2016

Food and drink industry urges budget action to safeguard jobs

By Michelle Perrett

- Last updated on GMT

Budget 2016
Budget 2016

Related tags Chief executive Alcoholic beverage

The food and drink industry is calling for Chancellor George Osborne to take action on duty, help small businesses and support green energy in the budget today (Wednesday March 16). 

The calls come as Osborne revealed an extra £4bn cuts were needed by the end of the current Parliament. He said that the UK economy was £18bn smaller than originally thought, because of lower than expected earnings and inflation.

As the chancellor puts the finishing touches to his budget, 36 British Beer & Pub Association members signed a joint letter sent to The Times,​ headed:  ‘Beer duty and jobs’.

Fourth cut in beer duty

It called for a fourth cut in beer duty in the budget to boost investment and protect jobs. Signatories included a wide range of brewers from Heineken, Molson Coors to AB InBev UK.

The letter said: “Brewers and pub operators will invest around £1bn this year, yet beer duty is still 37% higher than in 2008. The UK tax rate is still an astonishing 13 times higher than in the largest European beer market, Germany, and three times higher than the EU average.

“More jobs, and an end to the steep decline in beer sales, mean that a cut in duty would cost very little in overall terms.”

English wine and British gin have already teamed up with Wine & Spirit Trade Association chiefs to petition the Treasury for a 2% duty cut.

Ease the burden on industry

Meanwhile, the Food and Drink Federation (FDF) has called on the government to ease the burden on the industry and help small businesses.

“We want to work with government to ensure the UK’s makers, bakers and bottlers – many of them smaller firms – survive and thrive in a fiercely competitive global marketplace,”​ said FDF director general Ian Wright.

“FDF is acutely aware of the need for the Exchequer to balance difficult spending decisions on public finances to secure continued deficit reduction. We strongly urge government to prioritise spending in those areas which are proven to drive productivity and growth.”

The Anaerobic Digestion and Biogas Association (ADBA) has called on the government to allocate at least £25M to help develop new projects to continue the development of green gas and electricity. 

ADBA’s chief executive Charlotte Morton said: “We are calling on government to allocate £25M of the increased innovation programme for demonstration projects, such as power-to-methane and digestate processing.”


Budget 2016: what the food and drink industry wants

British Soft Drinks Association​, director general, Gavin Partington:

“The government should demonstrate a real desire to boost British food and drink exports with schemes that reward long term investment and back British manufacturing jobs.

“Beyond this support for our convenience stores, pubs and shops in terms of a rethinking of business rates would also be very much welcomed by the soft drinks sector.”

Food and Drink Federation​, director general, Ian Wright: 

“It is right that food and drink meets the highest levels of quality control and safety expected by consumers. However, we are concerned that an accumulation of burdens through additional reporting requirements and costly changes to the energy tax regime, will impact on what we can deliver for consumers and the economy.”

British Beer & Pub Association​, chief executive, Brigid Simmonds:

“Top priority is a cut in beer duty. A further 1p duty cut in the Budget is the one targeted measure that would ensure a pint remains affordable, help pubs, secure thousands of additional jobs, and boost investment. Duty cuts are also popular with the public, and I urge everyone to support the campaign.”

EEF​, the manufacturers’ organisation, chief economist, Lee Hopley:

“Our evidence shows that removing plant and machinery from the calculation of business rates could help tip the balance for some companies, notably small manufacturers looking to scale up, and large manufacturers facing international competition.

“Given manufacturers’ investment intentions are currently subdued, government needs to act now to remove this tax on investment and help to anchor manufacturing in the UK. Any moves that bring additional investment into manufacturing and the UK economy can only be good for UK growth and productivity.”

Wine and Spirit Trade Association​, chief executive, Miles Beale:

“To build on his admirable decisions at the last two March budgets, and to move away from some of the highest excise duty rates in the EU. We are calling on the government to cut excise duty on wine and spirit by a modest 2%.

“Evidence now clearly shows that these cuts are not only popular, but have led to greater revenue for the Exchequer, more jobs, greater investment by the industry and a better deal for consumers.”

Campaign for Real Ale​, chief executive, Tim Page:

“If the chancellor goes ahead and increases beer duty, the danger is that we could be placing all the benefits that have been achieved over the last three years at risk.

“In some cases, that could mean jeopardising the existence of some breweries and pubs and the jobs of the large number of people that work for them. Crucially, it is the customer who could suffer with increased prices, a reduced choice of beers and a reduced choice of pubs to visit.”

Scotch Whisky Association​, chief executive, David Frost:

“The chancellor needs to Stand Up For Scotch again in next week’s Budget and cut excise duty on Scotch whisky by 2%. Another cut will help deliver growth in this iconic British industry, while providing a fairer level of tax for Scotch whisky drinkers in the UK.”

Freight Transport Association​, deputy chief executive James Hookham:

“Regardless of the price of oil, for every penny fuel duty goes up it costs truck and van operators around a £100M in a full year.  It won’t make them drive any less – goods still need to move to where they are needed – and it won’t help them invest in making their vehicles and drivers even more efficient.  It will just cost them a lot of money.” 

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