Beer and Pub Taxation
Debate between Alistair Carmichael and Mike Wood(4 years, 10 months ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
The hon. Gentleman may wish to remind his colleagues in the Treasury of a helpful precedent that they may wish to follow. The coalition Government cut the duty rate on spirits by 2p. At the time, that was expected to reduce revenue; in fact, revenue increased fairly significantly as a result.
Mike Wood
I agree with the right hon. Gentleman. Indeed, there is an even more recent example. The excise revenue from beer is up £250 million compared with Treasury forecasts since 2017-18. That appears largely to be down to boosts to beer and pubs following freezes in duty in the 2017 and 2018 Budgets. Further action on beer duty in the Budget would clearly boost jobs and investment in beer and pubs. It would also likely lead to additional custom, which generates extra revenue.
Beer duty needs to be lower overall. Within that, we need to look at how that beer duty is levied. We need a wider review, first to look at the operation of small breweries relief and whether it acts as a disincentive to growth and expansion, and secondly to look at how beer duty can better support our community pubs, rather than the “stack ’em high, sell ’em cheap” produce in some off-licences and supermarkets.
Now that we have left the European Union, with the implementation period ending at the end of the year, there is an opportunity for a fundamental review of how duties are structured. I urge the Treasury to look at how beer duty could be levied at a lower rate for beer that is likely to be sold in pubs, and particularly when it is levied on draught beer, kegs and casks rather than small-pack cans and bottles. Supporting our community pubs in that way, without giving the dead cost of duty cuts to supermarkets, would make a big difference to many of those pubs.
Members on both sides of the House will not need persuading of the intrinsic value of pubs to not just the economy but society as a whole. As ever, it bears repeating that the pub is in many ways synonymous with the UK.