Category: Taxation
Hits: 427

More than 6,000 pubs have closed due totaxation and red tape since 2006, according to a study.

The report, Closing Time Whos killing the British pub, released by the Institute of Economic Affairs, claims that the rapid acceleration of pub closures could not be explained by factors such as changing tastes and the shift towards home drinking.

The reports author Christopher Snowdon says the alcohol duty escalator, policies such as the smoking ban and declining real wages as a result of the recession were to blame for the number of pubs plummeting from just over 58,000 in 2006 to 48,000, a drop of nearly 20%.

He said Government policy had actively discouraged people from spending time in the pub, suggesting that alcohol duty and VAT must be lowered and one-size-fits-all policies such as the smoking ban must be reconsidered to end the downward spiral.

While there had been a 16% fall in beer purchases in the off trade since 2003, a 54% fall in beer purchases in pubs meant they were selling half as much as they did 11 years ago.

The report said the past seven years had been characterised by a flurry of policies which had severely damaged the pub industry, such as the increase in alcohol duty and the introduction of the duty escalator and the rise in VAT, combined with falling real wages during the recession making drinking less affordable.

The report suggests a halving of alcohol duty, a reduction of VAT to 15% and a lower rate of VAT for food sold in pubs and restaurants, a relaxation of the smoking ban and the abolition of cumulative impact zones.

Mr Snowdon said: British pubs may be suffering from long-term cultural shifts, but Government policies have hugely exacerbated this trend. Taxation and regulation have been the leading causes of the decimation of the UK pub industry since 2006.

The level of alcohol duty in the UK is hugely regressive, hitting the poorest the hardest. Taxes must be lowered, and one-size-fits-all policies like the current smoking ban must be reconsidered if we are to temper the rate of decline of the British pub.