Here for the beer

Against all odds, Britain's real-ale industry is thriving. Tom de Castella explores the regional bre

On 22 September, the world's most famous beer festival begins in Munich. But just as there is a misconception about when Oktoberfest starts - September, confusingly - so, too, there is one about its status as a beer pilgrimage. In truth, it's a Bavarian knees-up beloved by tourists and devoted to established brands. You can't wander around and sample; instead, the visitor must choose a tent belonging to one of the city's big-name brewers, sit down at a table and drink the same thing all night.

Britain's equivalent comes far closer to being a real beerfest, although it, too, is built on a glaring contradiction. Every year in August, tens of thousands of people converge on a huge, soulless hangar in central London in search of the rich cosmos that is Britain's local brewing industry - an abundance of bitter, mild and stout with names like Shropshire Lass, Pit Shaft, Golden Lance and Roaring Meg. Each beer has been uprooted from its natural ecosystem, lugged hundreds of miles in a lorry to central London and served up in a building with all the ambience of a bus depot in Ceausescu's Romania.

It's about as far from the fireside pint at the local as one can get, but people love it. Set up by the Campaign for Real Ale (CAMRA) in 1977, the Great British Beer Festival has become one of the capital's summer highlights since it moved to Olympia in 1992, and last year to the even more cavernous Earls Court, attracting 66,000 people over the five days. That's still only a hundredth of the attendance of the 17-day Oktoberfest, but not bad for a tipple that not so long ago was being read the last rites by drinks-industry analysts.

I'm a son of Burton-on-Trent, so really it's my solemn duty to go along. Real ale is special because it uses traditional ingredients that are left to mature in the cask through a process called secondary fermentation, which is what lends it its rich, complex flavours. So there I was again, on the opening day of the 30th festival, being issued with a pint glass and wondering which of the 700 brews to start with. I found myself at the stand labelled Central Southern England - CAMRA does love its confusing subregions - and began with a third of Moleton Silver from the Moles Brewery in Wiltshire.

Crudely speaking, my fellow drinkers could be split into three distinct groups - the demob-happy, after-work crowd in suits and shirtsleeves, the hardcore real-ale fans with the standard-issue paunch and facial hair, and last the tourists, delighted by what they had stumbled upon. It's usually a wider mix of ages than you get in most bars or pubs, and in ethnic terms there seem to be a lot of Chinese and Japanese drinkers, although real ale doesn't seem to have made many inroads with black Britons. But before the government starts drawing up proposals for an access regulator, it is worth pointing out that the festival's appeal is evolving organically. Although eight out of ten women have never tried real ale in the pub, there is a growing number of female enthusiasts and perhaps a third of drinkers in the hall were women.

This year CAMRA introduced the third of a pint measure to maximise one's opportunity to sample. And that is the event's charm: once you've paid your £8 to get in, you can, rather like an adult Charlie in the chocolate factory, explore every region of Britain at sub-London bar prices. The real fun comes in comparing notes with your fellow drinkers. My party variously decided that Burton Bridge's Golden Delicious was "seaweedy", Skinner's Betty Stogs Bitter was "sau sagey", 1648's Lammas Ale "would be good with chocolate cake" and Bushy's Pure Gold from the Isle of Man was "sessionable".

The picture one gets is of a brewing industry in rude health. But away from this one-off extravaganza, cask ale accounts for only 7 per cent of beer sales in the UK, with 55 per cent of all beer being sold at supermarkets and off-licences. The big four brewers - Scottish & Newcastle, Coors, InBev and Carlsberg - are global brands with more than 80 per cent of the domestic market that have ditched bitters to concentrate on buying up the world's most lucrative lager brands. Real ale is an irrelevance to them. But their lack of interest has left room for the larger regional brewers such as Marston's, Greene King and Fuller's, and beneath them hundreds of micobreweries.

Real-ale fans have mixed feelings about the medium-sized players. On the one hand they are serious about selling cask ale and investing in their breweries. On the other, they are predators, buying up the small and interesting and, in the case of Greene King, closing them down, moving production to their own Bury St Edmunds HQ, and forcing newly acquired pubs to replace local favourites with their own beers. The microbrewers are what the Great British Beer Festival is really about and on this score there are grounds for hope. They may account for only 2 per cent of the market overall, but they seem to be on a roll, aided by the trend for local food and drink.

It's not just about taste. Drinking beer produced by a local business five or ten miles down the road rather than shipped from the other end of the country seems sensible: "sustainable", if we must. And the thousands of vertical drinkers at Earls Court demonstrated another virtue - handling their booze. Without academic research into this murky area one can only speculate: is it the real-ale drinker's nature or the qualities of the drink itself that make its effects more good-humoured than the belligerent feeling lager drinkers get? A bit of both, I suspect. Perhaps officials at the Treasury should look into the practicability of bringing in a variegated duty for beer, with real ale benefiting from lower rates than "antisocial" lager.

The champion beer this year was a Shropshire brew called Hobsons Mild. But for me Butcombe Bitter from Wrington in Somerset won the day. The whole process is subjective, of course - not only do I like its nutty bitterness, but there's the fact that I discovered it some years ago in a pub in Pilton before a rain-sodden Glastonbury Festival. In beer, geography, memory and taste are all intricately linked, which is why our local breweries are so important to the country's heritage. The Great British Beer Festival brings this diversity together and inspires you afresh, so that in the end the contradiction of paying homage to a local craft in a big shed in Earls Court dissolves into your glass with the hops and barley.

This article first appeared in the 17 September 2007 issue of the New Statesman, How the Americans misled Blair over Iraq

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.