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NEWS Brewer calls for duty ‘rebalance’

BREWING giant SABMiller has called on the UK government to “rebalance” alcohol duty at next month’s budget.

Claiming beer duty has risen 20% in the last

13 years while duty on spirits has fallen 15%, the brewer said the disparity between the two sectors has been a “clear driver” in shifting consumers to higher strength products and “compounded the challenges” facing the beer sector, which include an increase in the rate of pub closures. The brewer is calling on chancellor George Osborne to use the March 23 Budget to “re- balance” duty to differentiate between higher and lower strength alcohol products. “The aim should be to nudge consumers to-

wards lower strength products, such as beer,” said Kristin Wolfe, the brewer’s head of alco- hol policy. “This will help protect jobs, support important domestic businesses and refl ect the

higher risks associated with higher-strength categories of products.” But the Wine and Spirit Trade Association has called on the treasury to abandon its alco- hol tax escalator altogether, claiming a 6.8% increase next month would mean duty on wine has risen 35% and spirits 30% in the last three years. Chief executive Jeremy Beadles said such a

move would help “hard-pressed” consumers and a sector which “ought to be part of the drive to restore economic growth” in the UK. “With the recent VAT increase adding to the weekly shopping bill, it’s no time to force drinks prices up further with another infl a- tion-busting tax increase,” he said. “The scale of tax rises on wine and spirits in recent years has cost thousands of jobs and made matters worse for households struggling to cope in diffi cult economic circumstances.”

Trade group urges operators to ‘test’ commitment

Business lending pledge welcomed

SMALL business owners are be- ing urged to ‘test’ the commit- ment given by banks last week to lend more to the sector. Giving a cautious welcome to a pledge by the UK’s biggest banks to lend £76 billion of new credit to small and me- dium-sized enterprises (SMEs) this year, the Forum of Private Business questioned how banks will achieve the target, which is up 15% on last year’s.

The commitment to lend a total of £190bn to businesses in 2011 was made by Barclays, HSBC, Lloyds Banking Group, RBS and Santander following talks, known as Project Merlin, between the banks and the UK government. FPB chief executive Phil Or- ford questioned how banks plan to increase lending this year, claiming less applications for funding are being made. “The banks say demand is

down,” he said. “They say ap- plications are running at an 80% acceptance rate. “If this is the case, how do

they intend to increase lending to small fi rms by 15%? “I believe the answer is that

they must review risk criteria and be less punitive on viabil- ity assessments – and make a particular effort to cut down on sector-based discrimination. “The banks must be more pro-

active in securing up to date fi - nancial information from their clients and they need to com- municate more clearly to appli-

Chancellor George Osborne (left) welcomed the banks’ pledge to lend more to small businesses but FPB boss Phil Orford questioned how it will be achieved.

cants what the key assessment criteria are so applications are more compliant with the lend- ers’ needs. “The message now to all small businesses is that the banks have committed to lend more; test them on their commmit- ment and get your applications in.”

The commercial fi nance arm

of property agent Christie & Co also welcomed news of the banks’ commitment to increase lending. But David Grant, head of UK business mortgages at Christie Finance, said he hoped it was ‘new’ funding. “Given our 2010 experience

of increased year-on-year ac- tivity, we would hope the ma- jority of this £76bn is directed towards new transactional

businesses and not just simply re-priced, refi nanced and re- cycled existing small business debt,” he said. “Much of last year’s lending

was just that and thereby en- abled the banks to conveniently label it ‘new’ lending.” In a letter to the banks, chan- cellor George Osborne wel- comed what he described as an “unprecedented industry initiative”. “It [the government] is com- mitted to maintaining a strong, resilient, stable and globally- competitive UK fi nancial ser- vices sector, in which UK banks can both compete with the best banks in the world and play their full role in supporting UK businesses and households,” he said.




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February 17, 2011 - SLTN - 3



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