Budget 2013: Chancellor praises Bristol MP Charlotte Leslie's campaign to scrap duty escalator

21-March-2013
21-March-2013 10:55
in General
by Mike Ribbeck, The Bristol Post

Even though there appeared to be little to cheer about in George Osborne’s Budget, one Bristol MP was claiming a personal victory.

Charlotte Leslie came in for special praise from the Chancellor when he announced that he was cutting the cost of a pint by a penny.

The Bristol North West Conservative MP has fought a prolonged campaign to have the unpopular beer duty escalator – which had been due to add 3p to the price of a pint this year – scrapped.

Her campaign ended in victory yesterday and Ms Leslie said she was "really surprised and really chuffed" that the Chancellor had acted.

But the news for cider drinkers and smokers was not so good, as duty on both is set to rise.

The duty changes were part of a series of measures including help for working parents, the decision to axe a planned raise in fuel tax and changes to income tax. There were also measures designed to get the housing market moving and an announcement on extra cash for the regions to spend on major projects.

But along with the good news there was renewed warnings about the fragile state of the economy and cuts in wages in the public sector.

Ms Leslie has been urging the Government to drop the escalator amid a backdrop of pubs closing or struggling to stay afloat as a result of the recession and cheaper drink in supermarkets.

She said: "This decision will help pubs reclaim their role at the heart of their communities. For five years now they have not only had to struggle with the effects of the recession but also a deeply unfair tax.

"The irony was that with pubs going to the wall, the exchequer was not really benefiting anyway. Now we have removed a sizeable obstacle which was preventing pubs from thriving and communities across Bristol can be more confident their local will still be open in the months and years to come than at any time since the last Government introduced this tax.

"The escalator meant that for a pint costing

£3.50, only a third or so stays with the landlord. This meant that for every pint sold, landlords were gathering just over £1 with rent, salaries, investment, upkeep and the myriad of things needed to run a pub still needing to be paid. Now that money can be kept in the business."

North Somerset firm Thatchers is one of the biggest independent cider producers in the country.

The company’s managing director, Martin Thatcher, said: "We welcome the news that the Chancellor believes the duty escalator is flawed, but we are disappointed he has decided to remove it just for beer.

"We look forward to having the opportunity to discuss with Government the removal of the duty escalator for all alcohol, including cider.

"Cider makers will recognise the benefit for a hard-pressed pub industry from this move. As vibrant pubs have a drinks offer much broader than just beer, the abolition of the escalator for all alcohol would have gone further."

Imperial Tobacco, the world’s fourth largest tobacco firm, has its headquarters in Bristol and employs more than 700 people in the city.

Amal Pramanik, Imperial’s UK boss, said: "The excessive increase in tobacco duty doesn’t make sense. Nearly a quarter of the cigarettes consumed in this country evade the already high level of UK duty and this will only make the illicit trade problem worse.

"The Chancellor could have made a stand against the criminals by implementing a duty freeze or, at worst, an increase in line with inflation. Instead, he has given them a helping hand.

"As a result, the Treasury will continue to lose billions of pounds each year to the counterfeiters and smugglers. This cannot be acceptable, particularly in the current economic climate."

The Chancellor has announced extra cash for the regions but it is still not clear how the money will be allocated.

The extra

£3 billion per year will be targeted at large infrastructure projects, with the aim of boosting economic growth.

The money is expected to go towards new roads, railways, power stations and other large-scale projects. Alongside this Mr Osborne said he will be adopting Lord Heseltine’s proposals to funnel money away from central Government and into the regions.

Bristol Mayor George Ferguson believes the city could be a big winner as a result. He said: "I welcome the Chancellor’s confirmation in the Budget that the Government will be accepting the majority of Lord Heseltine’s Review.

"The move to a single pot of funding for cities is essential and is something I have lobbied hard for with a range of ministers over recent months.

"Bristol and the other core cities are well placed to help drive growth and the devolving of funds is crucial to this."

Colin Skellett, chairman of the West of England Local Enterprise Partnership, which is in charge of encouraging economic development in the Bristol area, said: "There were plenty of positive things to come out of the Budget, particularly the fact that the Government is going to adopt the findings from the Heseltine Review.

"We still need to understand the details of how we will go about accessing the funding but this has to be seen as a positive thing for Bristol and for the wider region."

Phil Smith, the head of Business West, Bristol’s biggest business organisation, gave a muted welcome to the Budget.

He said: "With growth still faltering and few options for extra spend, delivering a fiscally neutral budget was a real challenge.

"Sticking to ‘Plan A’ is obviously still the Chancellor’s goal, which we applaud.

"But with economic recovery slower than expected, businesses are getting restless about the lack of real action and progress.

"While we recognise there were some real positives for business in the Chancellor’s statement we also feel it could have gone a lot further to support small business, enterprise and growth.

"Businesses across the country called for the scrapping of damaging increases in business rates, but our call was ignored by the Chancellor.

"Whilst we welcome the demand side stimulation provided through the

£3.5bn investment in shared equity loans to help get people onto the housing ladder and the mortgage guarantee, we would like to see more direct support for construction and housing.

"We’re still not building enough homes in the UK but the government has done little to unlock investment to enable this to happen.

"Perhaps the most important announcement in the Budget was the acceptance of the recommendations made by Lord Heseltine to create a ‘single pot’, devolving funding for housing, skills and transport. Whilst the detail has not yet been announced, this is a major boost for our cities and for business, with spending devolved to the local area where it can focus on real local priorities."

One of the key policies was the drive to breathe life into the housing market.

Jeremy Richards, head of property company Jones Lang LaSalle’soffice, said: "It was disappointing that the Budget contained no news on how the Government will allocate resources to regional LEPs or through the Heseltine Review.

"However, we welcome measures to open Britain’s doors to more international business.

"The Help To Buy scheme, with its

£130 billion of Government-backed mortgages, can only be good news for construction firms and will help stimulate the housing market.

"Boosting infrastructure by

£3 billion a year is also welcome – the construction industry tends to have very UK-based supply lines, meaning that benefits do not ‘leak out’ and increase exports."

Labour MP for Bristol East Kerry McCarthy said the Budget was "bad news for Bristol".

She said: "George Osborne has had to admit that his economic plan has failed. Once again the Chancellor has been forced to downgrade growth while confessing the Government is borrowing more money. The Chancellor seems oblivious to the damage he is causing.

"Since George Osborne’s Spending Review in 2010, the UK economy has grown by just 0.7% compared to the 5.3% forecast at the time. Without growth we cannot get the deficit down and we cannot get people back to work.

"In my own constituency over 5.4 per cent of people who can work are out of work. At the same time, people in work have seen their wages frozen and their standard of living decline as the cost of living increases.

"The Chancellor cannot keep laying the blame at the door of the last Labour Government or the difficult economic situation in Europe. It is his plan that had failed. People are worse off under the Tories and it is time for this downgraded Chancellor to go."

"While I welcome the move to cut beer duty by 1p, let us not forget that it was this Chancellor’s decision to increase VAT in 2011 which added around 5p to the price of a pint. Cutting the duty on beer will be cold comfort to people who will struggle to pay an average of

£14 per week on the Bedroom Tax or the hundreds of thousands of people who are depending on Foodbanks just to get by."

Liberal Democrat MP Stephen Williams praised the beer duty cut, saying people in his Bristol West constituency would be "raising a glass" to the Chancellor.

Mr Williams also told MPs that raising the personal tax allowance to

£10,000 was an "extraordinary achievement" and that he was "very proud" of the role his party had played in delivering it.

He said: "We have cut taxes for people in work, we have cut taxes for people entering work, and we’ve provided a boost for housing. We are building a stronger economy; building a fairer society, where everyone is able to get on in life."

Kingswood Tory MP Chris Skidmore said the

£10,000 tax threshold would be "hugely welcome" in his constituency.

He added: "Already more than 30,000 hardworking people on low incomes in the local area are paying less tax as a result. We have to be on the side of those people who work hard and want to get on in life."

North Somerset MP and former Defence Secretary Liam Fox said the level of borrowing in the Budget showed how much George Osborne "was constrained by Gordon Brown’s debt legacy and single currency disaster".

Earlier this month Dr Fox called for a major rethink of economic policy, including an end to ring-fenced spending for schools, international aid and the NHS.

Weston-super-Mare MP John Penrose said Mr Osborne had done "brilliant work" on the employment allowance, something he believed would "boost small businesses right across the South West".

He added: "He’s also fixed the personal allowance, which again means low-paid folk will pay less tax, but what I really liked about the Budget is that the Chancellor hasn’t given way on tackling the deficit."No one likes having to bring it under control but you’ve only got to look at Greece and Cyprus to see that it’s something we can’t duck."

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