Beer Duty Escalator

Andrew Griffiths Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

My hon. Friend has made a valid point. Not only is everyone in South Staffordshire rooting for the ending of the beer duty escalator, but so are those in the great county town of Worcester. Obviously their pubs are not as fantastic as those in South Staffordshire, but we all have our crosses to bear in life.

We recognise that the Government face a great challenge. It is not easy to do what they are doing, and Treasury Ministers carry a burden on their shoulders that I am sure none of us on the Back Benches would wish to carry.

[Andrew Griffiths (Burton) (Con)]

As chairman of the all-party group on beer, I congratulate my hon. Friend on securing this debate. I am sure he agrees with me that the packed Benches at almost midnight show the strength of feeling in this House in support of Britain’s brewing industry. Does he share my shock that British brewers are paying half their income in tax to the Treasury, yet the future of the industry is at a critical point? Does he agree we can save jobs and pubs if we cut the duty on beer?

[Gavin Williamson]

As always, my hon. Friend and fellow Staffordshire Member of Parliament makes an excellent point. We want to encourage investment by our brewers into this vital industry and into our pubs.

--- Later in debate ---

[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.

[Andrew Griffiths]

Will my hon. Friend give way?

[Miss Smith]

I am sorry. I must complete my remarks within a few minutes, but as I said, I am happy to continue the conversation, whether in the bar or elsewhere.

CAMRA’s figures show that the net rate of pub closures has slowed dramatically over the past two years. I believe the BBPA’s figures support this. I support pubs as places where people can drink sensibly in a supervised environment and enjoy themselves responsibly. I want to reverse the trend towards pre-loading on cheap alcohol at home. I was out with Norfolk constabulary in my neighbouring constituency, Norwich South, on Saturday night, observing some of the problems in action in places that are not as friendly as the community pubs that have been spoken about tonight.

In my view, minimum unit pricing will help to tackle the issue of excessive alcohol consumption and heavily discounted alcohol sold in supermarkets and off-licences. I strongly believe that that will benefit pubs and the responsible on-trade once we can tackle the demand for cheap alcohol in supermarkets. It is of interest to hon. Members here tonight that we have introduced a 50% reduction in alcohol duty for low-strength beers. That may be a growing sector in the industry.

In brief response to my hon. Friend the Member for Amber Valley (Nigel Mills), the Government are committed to tackling alcohol fraud and avoidance, and have been working in collaboration with the industry to address that. There are a number of measures that we wish to take to act on that.

At the Budget, this Government knew that it would be unfair to place further burdens on the alcohol industry, on pubs and on responsible drinkers. This is why we did not go further than the pre-announced duty increases. But I return to my main point. There is an important question of the public finances. The revenue from these increases was included in the public finance projections at that time. It would now require the raising of other taxes to pay for removing them. That is the question that I ask hon. Members to consider. I am sure that many pub conversations come up with the best answers to that, which hon. Members may like to go on to discuss.

This year’s duty increase and those to 2014-15 form part of our vital plan to reduce Britain’s debt, which is required to ensure low interest rates and a stable platform for growth for everybody—drinkers, businesses and households. We will continue to keep all taxes under review and monitor the impact of alcohol duty—