Beleaguered pubs, already closing at the rate of 1,800 a year nationwide, will be hit hard again by the increase in VAT which came into force this week, according to a group of Oxford economists, who also predicted that about 8,800 jobs will be lost in the beer business.

The average price of a pint of lager will break through the £3 barrier for the first time, thanks to the VAT increase from 17.5 per cent to 20 per cent and to the 26 per cent increase in beer duty imposed on the trade over the past two years.

Now the British Beer and Pub Association is lobbying the Government to abandon plans to increase beer duty above the rate of inflation yet again in the March budget.

Andy Logan, of Oxford Economics, the consultancy which was commissioned by the trade association to carry out a survey into the likely impact of beer price increases, said: “VAT will hit pub sales particularly hard simply because prices are higher in pubs than in supermarkets — so the price difference between the two will increase again, encouraging more people away from pubs.” He added: “On top of the 8,800 job losses we think will occur as a result of the VAT increase, there will be another 10,000 losses if beer duties rise in line with the Government’s tax escalator.”

Oxfordshire publican Bal Gill, who recently took over the tenancy of the historic Abingdon Arms in Beckley and now runs three Oxfordshire pubs, said: “These are difficult times, but food is really the key these days in pubs — though drink sales should pay the rent.

“It’s harder to provide the range of food and drink now to attract vital new trade without cutting corners.”

But he added: “It's hard to assess the long-term effect of VAT increases just yet. This is a tricky time of year anyway because trade always dips just after Christmas.

“It's all a question of balance. For instance, the drop in trade would in most years be balanced by the increase in trade before Christmas — but of course this year the cold weather meant about 60 per cent was cancelled.

“We will just have to work harder to stay in the same place. But we’re survivors here.”

Paradoxically, The British Beer and Pub Association reckons higher duties and taxes will actually lead to falling revenues for the Government as beer sales decline.

Spokesman Neil Williams said: “According to our model, prices have now reached a level so high that further increases would actually reduce tax revenues as people would buy less beer in pubs.

“Now our task is to convince the Treasury of this and persuade them not to raise prices again in March. At present the so-called tax escalator means prices are set to rise again at the rate of inflation (measured by the Retail Price Index) plus two per cent in March.“ He added that since 1997, beer prices in pubs have increased faster than those of other drinks, including spirits, thanks to more taxes and duties being put on beer.

The latest Oxfordshire pub to announce plans to toll the final bell is The Waterwitch in Crockford Road, Didcot, owned by brewer Greene King, which plans to build eight houses on the site.

Spokesman for Greene King, Dawn Humphreys, said: “The pub is unviable as a business and it would be unfair of us to allow licensees to continue to trade it as such. The planning process is likely to take around 12 weeks and, if permitted, the pub will then be sold. In the meantime, the pub will remain open.”

Licensee Robby Warrior, 29, said: “When I started here two and a half years ago the pub was making about £5,500 a week.

“The pub makes £2,200 a week now, but with the rent and other expenses it costs £3,500 a week to run, and I have told Greene King I cannot afford to keep making a loss.”

In Chipping Norton, West Oxfordshire District Council granted planning permission on December 7 for seven houses to be built on the site of The Albion in Burford Road, which has been closed for months.

And just a week later the council received an application for four houses to go up on the site of The Bell in West Street which, if granted, would leave Chipping Norton with just six pubs.

Tony Goulding, pubs officer for Oxfordshire Camra (Campaign for Real Ale), said: “There are about 700 pubs in Oxfordshire and there will be more casualties in the coming years — about two or three per cent a year.

“In 2010 we lost between 12 and 15 in the county, with supermarkets taking over about three or four sites and the rest going for housing or redevelopment.

“The Mitre bar in Oxford city centre closed for student accommodation and the Woodstock Arms in Woodstock Road has closed for housing.

“But it's not all gloom and doom. Oxfordshire is surviving better than some places such as Liverpool, which has lost about 20 per cent of its pubs.

“Also some areas are riding out the storm by offering good food-dominated pubs that manage to retain a traditional atmosphere.

“In Witney, for instance the town, has only just lost its first pub in 25 years, the House of Windsor in Hailey Road. The landlord wants the site for housing.

“Pubs are being hit from all sides. But it depends on your pocket. In some areas people will pay for good food — and I think food is the way forward.”

Back in Beckley, Mr Gill said running three pubs increased his buying power.

He added: “There’s a fine line between pubs turning into restaurants and not keeping local people, and pubs that aren’t attractive to visitors from elsewhere.”

He said customers were becoming ever more discerning and that many now came to the Abingdon Arms because of its heritage.

Lewis Carroll was inspired to write Alice through the Looking Glass there after admiring the view over Otmoor — which looked to him like a chess board. And Evelyn Waugh drowned his sorrows there after receiving a disappointing degree from Oxford University.

All in all, it seems that in the world of pubs, change is the only constant.

But as Hilaire Belloc wrote: “When you have lost your inns, drown your empty selves, you have seen the last of England.”