Beer Duty Escalator

Alec Shelbrooke Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

My hon. Friend makes a valid point about the impact on jobs in the industry of the beer duty escalator, which I was coming on to. In my constituency of South Staffordshire, 1,286 people are employed in breweries and pubs—whether in the fantastic brewery of Enville, the brewery of Kinver, the Morton brewery in Essington, the Marston’s brewery in neighbouring Wolverhampton, or in the 86 pubs scattered across the constituency. Unfortunately, however, these pubs have declined in the last few years, and I am afraid that the beer duty escalator has had an impact in that respect.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Does my hon. Friend agree that a sensible way of helping pubs might be to lower the duty on draught beer but raise it on canned beer?

[Gavin Williamson]

My hon. Friend is not known as a visionary—I believe that his new wife often refers to him thus—for nothing. I hope that the Minister is noting his ideas eagerly, and will recommend them to the Treasury as a host of examples of radical new thinking that could improve and support our breweries and pubs.

--- Later in debate ---

[Miss Smith]

Again, a fine point is made. I am the first to support the notion of encouraging young people into work and work experience, but we have to be realistic. The Treasury and the Government face a number of proposals from different industries that say, “Ours is the industry that holds the key,” and I am sympathetic to those arguments. There is, of course, much evidence to go into for all such proposals, but it is important to proceed as a responsible Government, and to try to take into account the revenue that is required to fund vital public services and that, as I say, helps everybody.

[Alec Shelbrooke]

To expand on my intervention on my hon. Friend the Member for South Staffordshire (Gavin Williamson), perhaps we can look at a tax-neutral way of getting more people into pubs, which create so many jobs. As there is an onus on landlords to ensure that people drink sensibly on their premises, that, rather than minimum pricing for alcohol, may help to tackle alcohol abuse.

[Miss Smith]

On that note, let me come on to some of the factors affecting the state of the industry. It is important to be clear that duty is not the only thing affecting the state of the pub industry. We have all, I am sure, been in good pubs and terrible pubs, and the price of the beer is not the only factor involved. On the price of a beer, I point out that the pre-announced alcohol duty increases in question added only 3p to a pint of average-strength beer, including VAT. The total duty on a pint of beer is now 47p. I think that hon. Members will agree that, especially as alcohol consumption does, after all, carry its own costs and concerns, that addition in the Budget this year is not an overwhelming or unreasonable amount. It is something that we can consider in the context of the public finances and the challenges relating to them that have to be met.

As I say, alcohol duty is only one of a wide range of factors that determine the final price paid by the customer. Let us be clear about the position of the industry. The decline in the beer and pub industry that some talk of is influenced by a number of factors. Lifestyles are changing. People’s choices when they walk into pubs and other establishments are changing. People have more choice about whether they go to a pub or somewhere else. Removing the escalator, which is what has been asked for tonight, and the pre-announced duty increases would not solve those problems. There is very much a wider context.

My right hon. Friend the Member for Putney (Justine Greening)—my predecessor as Economic Secretary to the Treasury with responsibility for alcohol duty—and I have met a wide range of representatives from industry. As I said, I am happy to continue doing so. I recognise the important contribution that pubs and breweries make to local communities and to the wider economy. Many groups that have been prayed in aid tonight, such as the Campaign for Real Ale and the British Beer and Pub Association, have welcomed the work that we have done to date, such as the review of alcohol taxation in November 2010. We continue to keep all taxes under review.