Small Breweries Relief

Debate between John Healey and Grahame Morris

Monday 9th November 2020 Commons Chamber

[Grahame Morris (Easington) (Lab)]

I congratulate and thank the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). With a name like “Morris”, I should really be able to speak Welsh, and I am fifth generation Welsh. We are discussing a really important subject and I am pleased to have the opportunity to make a few brief points in this debate which, unexpectedly, is a little longer than originally planned.

It is tempting to lapse into puns and humour, but this is a serious business. As you know, Mr Deputy Speaker, I love beer, me—I love Indian pale ale, I love the ruby reds, I love a craft lager. I love all beers. Tonight we are talking not about the mass production of the big six brewers; we are talking about small breweries of which there are 90 in Wales, and 2,500 across the country, including Castle Eden Brewery—I must mention my one brewery, or they would never forgive me, and it produces what is probably among the finest beer in the world.

[John Healey (Wentworth and Dearne) (Lab)]

What’s it called?

[Grahame Morris]

Castle Eden ale. I highly recommend it.

As the right hon. Lady indicated, we are talking about the important issue of whether the Government, intentionally or unintentionally, are introducing anti-competitive practices. It has been suggested, perhaps not without foundation, that the large breweries have the ear of Ministers. Let us be in no doubt: the abolition of small breweries relief will be the death knell for many small brewers across the country, including in Wales and the whole United Kingdom.

As has rightly been pointed out, the introduction of small breweries relief led to a renaissance in British brewing. Those reforms should go towards strengthening the small, independent and craft brewers that we are so proud of, and that tourists and indigenous people on these islands love in equal measure. I hope that the Government will not make any changes to breweries that produce below 5,000 hectolitres, as to do so would threaten our craft beer industry, and local jobs in constituencies such as mine. Even worse, consumers such as me would ultimately lose out, with less variety and choice of beer. We should celebrate the diversity of brewers and different beers and tastes, and we should not do anything that will jeopardise that.

I worry that the decision to convert small breweries relief from a percentage to a cash basis threatens the long-term value of that rate, if it does not keep pace with the main rate. We get lost in numbers. What does 5,000 hectolitres mean? That is 3,000 old brewers barrels. My brewery, Castle Eden Brewery, produces just over 3,000 barrels, or 5,000 hectolitres. Compare that not with one of the big six or big four that produce millions of hectolitres, but with Camerons Brewery in Hartlepool, which is a producer of fine beer and produces 1 million hectolitres. It is impossible for a small brewery to compete with the economies of scale that a large brewery can bring to bear. Unless careful thought is given to it, the taper above 5,000 hectolitres will effectively bring an end to this prized and valued sector.

I promised to be brief, so I have just a couple of questions for the Minister, having listened to several debates and questions on the issue. Does she accept that cutting the threshold will lead to small breweries paying more duty? Does she understand that that will result in some small breweries closing? We must remember that the premise of the relief was that it would be revenue-neutral. How will she judge the success of the policy: by the number of UK small breweries, by the number of people employed by the industry, or by the reduction in market share of the big four that dominate? I would very much like to know what the Treasury’s objections are and how it will measure success.