This is what the booze and tobacco sectors are hoping to see in the Spring Budget

Courtney Goldsmith
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A barmaid at the Old Bell in London pull
Pubs are urging the chancellor to cut the beer duty (Source: Getty)

The countdown is nearly over - the Spring Budget is now just two days away.

Britain's beer and spirits sector has been campaigning for weeks in a bid to urge chancellor Philip Hammond to cut the beer duty while the industry grapples with cost pressures from rocketing business rates and increases to the national minimum wage.

Here's what the industry has to say:

Raising the beer duty will only bring modest gains

"The BBPA is highlighting analysis commissioned from Oxford Economics, which shows there is no 'pot of gold' for the chancellor in raising beer duty.

The leading economic research organisation estimates that 5,300 jobs would be lost if the chancellor raises duty as currently planned, rather than cutting it by a penny, as done three times by George Osborne.

The modest, £91m loss in beer duty would be almost entirely covered by an estimated £89m in extra revenue from boosted employment and other taxes. Even a duty freeze, rather than a cut, would safeguard 3,300 jobs, also at an exceptionally small net cost, of just £2m, to the treasury."

- The British Beer and Pub Association

Supporting pubs will create investment

Last week, 71 MPs signed a pledge card supporting the brewing and pubs sector ahead of the Budget.

"For all members of parliament, beer and pubs are vital to our communities. Support for the sector can bring more of the investment needed, to provide the great pubs that bring people together to enjoy a pint. I am delighted that so many fellow MPs have shown their support."

- Graham Evans MP, chair of the All-Party Parliamentary Beer Group

Cutting the wine and spirits duty will propel the sector

"Britons already pay more than 68 per cent of all still wine duties collected in Europe and over 27 per cent of all spirits duties. It is deeply unfair that hard pressed UK consumers already pay more than the Germans, French, Italians and Polish combined.

"If duty goes up – on top of the effects of the plummeting pound and rising inflation – it will inflict a triple whammy on British consumers. And yet doing just the opposite would be win, win, win. A two per cent duty cut for wine and spirits would benefit consumers, would benefit our industry and would benefit the treasury through additional revenue - just as it did two years ago.”

- Miles Beale, chief executive of the Wine and Spirit Trade Association

The tobacco industry is also pushing back against the chancellor's plans to introduce a minimum excise tax on cigarettes to discourage smoking.

But the industry says that won't work. Here's what they said:

A so-called tax floor on cigarettes targets lower earning smokers

"A minimum excise tax (MET) represents the final instalment of a triple whammy of price increases for smokers in 2017 and will disproportionately hit lower earning smokers by only increasing the cost of low-priced brands. It comes on the back of the annual tobacco duty increase and the price increases associated with the new minimum pack sizes and may well see many smokers pushed towards the black market.

"Given the government has already committed to introducing an MET, we are urging Hammond to take a pragmatic approach and adopt a rate that matches the current pre-Budget lowest price for a pack of 20 which is currently approximately £7. This will allow him to achieve his policy objective without disproportionately penalising lower earning smokers and inadvertently driving them to the black market."

- Will Hill, head of legal and external affairs for British American Tobacco UK

High tobacco taxes will fuel the black market

"The government’s tobacco duty policy – increasing taxes above the rate of inflation each year – has resulted in falling revenues and a well established illegal tobacco market. It is time for the government to see sense and scrap the tobacco duty escalator.

"The government has followed a policy of high and increasing tobacco tax, rising tobacco duty by two per cent above the rate of inflation each year, to discourage consumption while raising revenue.

"As a consequence, these tax increases have shifted consumption from the legal to the illegal tobacco market, reducing potential tax revenues."

- Tobacco Manufacturers' Association

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