Chancellor George Osborne has defied the EU by declaring that a tax exemption for small-scale cider producers is to stay in place.
And today his Budget announcement was hailed as ‘a terrific vote of confidence in the cider industry’ by MP Ian-Liddell-Grainger who chairs the all-party Parliamentary Cider Group.
Under the current duty regime roughly 80 per cent of the UK’s 500 cider makers are exempt from duty as long as they press no more than 70 hectolitres, or 12,000 pints a year. Most are hobbyists or small-scale farm gate producers.
But the EU has demanded that Britain end the exemption which, it says, is an anomaly with no parallels elsewhere in the Community.
However today Mr Osborne defiantly asserted the Government would retain the arrangement ‘unless and until a replacement scheme is established’ – signalling the Government’s intention to continue supporting small producers in one way or another because of their importance to the rural economy.
Mr Liddell-Grainger, Conservative MP for Bridgwater and West Somerset, said the announcement was the best news the cider industry could have hoped for.
“This is a terrific vote of confidence in the cider industry and clearly shows that the message really has hit home about how important cidermaking is to the countryside, both in terms of creating jobs where none would otherwise exist, and through the conservation value of thousands of acres of orchards,” he said.
“What has helped establish our cider industry as an undisputed world leader in recent years has been the arrival of new and innovative producers who have helped turn cider from something murky in a pint glass into a sophisticated drink for the connoisseur.
“A lot of these people have come up through the ranks after starting out on a very small scale and all have been helped to establish themselves by the duty exemption.”
Cidermaking has grown to such an extent that it now uses more than half the apples grown in the UK.
Mr Liddell-Grainger said: “The industry needs to continue attracting new blood but the prospect of paying up to £2,700 a year in tax would have been enough to deter many newcomers to the sector, and at the same time would barely have yielded enough revenue to cover the cost of collecting it.
“I am delighted that the Chancellor has recognised the importance of the cider sector and that – despite what Brussels may say – is clearly determined to continue supporting it.”