Beer and Pub Taxation

Alex Sobel Excerpts

Wednesday 5th February 2020 Westminster Hall

[Ms Rimmer]

Pubs have always sat at the heart of our communities and our societies. I remember how my dad, at the end of a hard day’s work, would go to his local for a pint to enjoy the companionship and relax. If we look back at history, we see how many of our rights originate from people sitting down in the local and planning for a better world: democracy, workers’ rights, trade unions. All of those had many of their roots in this country in the local pub. Even today, pubs play an important role. They are where we celebrate our success in work, love and life. It is where we cheer on our nations in sport and mourn our losses in wakes, raising a parting glass for those we have lost.

Pubs remain an integral part of the St Helens, Whiston and Prescot communities. We have many fantastic pubs across the constituency, including the Cricketers Arms, which deservedly won the 2017 national pub of the year award, but we have seen dozens of pubs close. Many local pubs across the country are struggling under current taxation arrangements, which makes it extremely difficult for local pubs to compete with massive supermarkets and large pub chains. People in the UK pay almost 40% of all the beer duty in the EU, while consuming only 12% of the beer. If we compare ourselves to similar sized nations such as Germany, their beer duty is 11 times lower than the UK’s rate. We need to ask ourselves why our taxation rate is so much higher. Some will argue that it is to discourage people from excess drinking: an aim I completely agree with. It is vital we make sure that people drink responsibly.

If we look at the Green Budget published by the Institute for Fiscal Studies in February 2016, we see:

“The current structure of alcohol duties is not well targeted at harmful alcohol consumption.”

In fact, because local pubs cannot afford to offer the same prices as supermarket chains, people drink excessively at home in pre-drink sessions. They feel under pressure to drink as much alcohol as they can before going for a night out at a pub or wine bar, where prices for drinks are higher than in supermarkets, partly because of the way in which our taxes are applied.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Many independent pubs in my constituency, particularly in Otley, complain about business rates as well as beer duty. Does my hon. Friend agree that that is also an important taxation issue?

[Ms Rimmer]

Of course it is. We have heard colleagues talk about it today.

If the aim is to raise money for the Exchequer, I agree with that aim, as taxes are important and pay for the vital things our society needs. However, the brewing and pub industry is a massive employer, with almost 900,000 jobs across the UK. The loss of those jobs would have a major impact on our economy and offset much of the income from the high taxes. We also find that the taxes are not applied evenly, with wine and spirits’ duty rates per litre of pure alcohol on an almost constant decline since 1978, yet beer has largely stayed constant and has gone up in some cases.

I therefore call on the Government to look at the way in which we support our local pubs. One way to do it is by improving the current structure of the small brewers relief. I also call on the Government to implement a modest cut in beer duty so that we can help our local pubs.

As the hon. the Member for Dudley South (Mike Wood) has said, 250,000 people have signed up to the Long Live the Local campaign, showing that the British people want to protect our pubs. Let us take the steps necessary to ensure that our great British institutions do not have to call for last orders permanently. I urge the Government to act.