The pub and brewing industry employs 900,000 people and contributes £12 billion to the UK, a pressure group has claimed in a warning to the chancellor not penalise the sector in his upcoming Budget.

George Osborne will deliver the Budget statement on 19 March, with many observers predicting more cuts to public services and tax increases to pay for the UK’s mounting debt pile.

But a report by the British Beer and Pub Association (BBPA) says he should freeze beer duty or force many small businesses to call last orders permanently.

Research by Oxford Economics for the BBPA shows 44 per cent of the 900,000 employed in the sector are between the ages of 16 and 24, a group currently beset by employment hardship.

The sector pays £11 billion in wages and adds £22 billion in value to the economy. Its tax contribution already more than covers the government’s entire transport budget.

Brewing is an industry on the rise with 1,092 breweries operating in Britain. These employ 80,000 of the total jobs in the sector, but the total is rising.

Brigid Simmonds, BBPA Chief Executive, said: "These 900,000 jobs are vital to the UK economy. The Chancellor played a blinder last year, with his historic and hugely popular cut in beer duty boosted jobs by 10,000.

“Let's ensure that the benefits are not undone this year - we need a beer duty freeze in the Budget."