Special report: Will Budget be a day to cheer for beer?

Particularly popular at the moment is Lemon Dream.

"It attracts huge interest," says director Jake Douglas, who runs the brewery with Wilf Nelson.

"I think the lemon beers appeal to so many different types of people, they appeal to lager drinkers as an introduction to real ale, they appeal to the ladies. Whenever we put something about Lemon Dream online, the web traffic goes through the roof."

These are good times for the real-ale brewing trade in Shropshire, with new breweries opening and existing ones expanding. This month marks the second anniversary of Salopian Brewery moving into its new premises in Hadnall, near Shrewsbury and Mr Douglas says this is in no small part down to the cuts in beer duty over the past three years,

"The cuts to duty have been beneficial over the past few years, as they have allowed breweries to invest in new equipment and in jobs," he says.

But brewers across the county are warning that all the progress that has been made in the beer and pub trade over the past few weeks could be put at risk if, as widely tipped, the Chancellor increases beer duty in next week's Budget.

Edward Wood, of Wood's Brewery in Wistanstow, near Craven Arms, says at the moment the beer industry is more vibrant than it has been for many years, but he too voices concerns on the impact a rise would have on the industry.

He says despite recent cuts beer duties are much higher than in other major beer producing countries.

The warnings follow a report by the Centre for Economics & Business Research (CEBR), commissioned by the Campaign for Real Ale (Camra), which suggested an increase would have a drastic effect on the beer and pub trade over the next four years.

It has been widely predicted that, following three years of cuts to beer duty, George Osborne will increase beer duty in line with inflation in his Budget next Wednesday.

The CEBR says this would halt the momentum built up over the past few years, and added that further increases would see beer sales hit an all-time low by 2020.

The report calls for a further 1p reduction in tax this month, and a subsequent freeze over the rest of the parliament. This, it says, would see the creation of 13,000 jobs in pubs and bars across the UK, and generate an additional £75 million investment in the brewing industry by 2020.

It would also save nearly 550 pubs from closure, it adds.

In 2008, then-chancellor Alistair Darling introduced the "beer escalator", which saw beer duty increase by two per cent above the rate of inflation every year until it was scrapped by Mr Osborne in 2012.

Mr Wood, who founded the brewery with his father and brother in 1980, employs 10 people.

He says the cuts to beer duty of the past few years have given a big boost to small independent brewers, which have seen rapid growth in recent years as a new generation of beer drinkers turns its back on the mass-produced lagers.

"We now have 1,500 breweries in Britain, which is great for competition, but if there were to be an increase in duty, it would obviously have the opposite effect," he says.

"While they scrapped the escalator, and we've had cuts to beer duty for about three years, we are still paying excessive duties – way above what they pay in Germany or the other good beer producing countries."

Mr Wood says many of Shropshire's breweries provided much-needed work in rural locations. He says many pubs in the countryside have also suffered in recent years.

Jim Preston, who runs Rowton Brewery, to the north of Telford, says the actual cost of putting a penny on a pint of beer would probably not make that much difference to sales.

However, he says the publicity surrounding recent cuts has had a positive psychological effect on customers, and any increase would reverse that.

Mr Douglas points out that the beer and pub industries supported 900,000 jobs across the UK.

"An increase in duty is always harmful, and it is especially so in a rural county like Shropshire where businesses can struggle at the best of times," he says.

Camra says the the beer and pub industry brings in £13 billion in tax revenue to the Exchequer each year.

The report says the UK pays nearly 40 per cent of all beer duty collected in the EU, yet provides just less than an eighth of the consumption.

Camra chief executive Tim Page, says: "This independent research shows any cut in beer duty is beneficial to the entire pub and brewing industry and to the wider economy.

"Without the last three cuts, beer prices would be higher and there would be fewer pubs. A fourth cut would keep the price of a pint down and keep pubs open."

Mr Page said an increase in beer duty would put all the good work of the past three years in jeopardy.

"That could mean jeopardising the existence of some breweries and pubs and the jobs of the large number of people that work for them," he added. "Crucially, it is the customer who could suffer with increased prices, a reduced choice of beers and a reduced choice of pubs to visit."

CEBR economist Sam Alderson says the past three cuts to duty have helped stem a decline in the British beer industry, saving more than 1,000 pubs and supporting more than 26,000 additional jobs.

However he says the present economic uncertainty and the introduction of the National Living Wage could pose a threat to the industry.

He adds: "It is clear that a further cut in duty should be considered in order to help sustain the momentum across the beer industry."

The Budget is famously the only time when an MP is allowed to drink an alcoholic beverage while addressing the House of Commons. All eyes in the brewing industry will be on Mr Osborne when he delivers his speech next week.