Beer Duty Escalator

Debate between Andrew Griffiths and Joan Walley

Tuesday 5th March 2013 Westminster Hall

[Joan Walley (Stoke-on-Trent North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Caton. I hope that you, the Minister and the hon. Member for Nuneaton (Mr Jones) will understand if I have to disappear for part of the debate to attend a meeting relating to my work on the Environmental Audit Committee, but I hope to be present for the closing speeches.

I congratulate wholeheartedly the hon. Member for Nuneaton on securing this timely debate. Only last week, in relation to a briefing in the Palace of Westminster, many of us sent postcards to the Chancellor, with the support of CAMRA and the Society of Independent Brewers, to say that the time has come for the Government to review the escalator. As the hon. Gentleman set out, the debate is relevant not only to the Chancellor and the Treasury but to the Department for Business, Innovation and Skills, because we are talking about British manufacturing and a sector that is at the core of all our constituencies. During the preparations for the Budget, it is vital that the sector’s contribution to the economy is recognised. In recent years, we have had lots of leaks in advance of the Budget statement, but in this instance I hope there might even be an early celebration of the Government looking again at what needs to be done.

In my constituency, the brewing and pub sector is a historic yet dynamic and vibrant part of the local economy; it creates jobs and is at the centre of the local hospitality industry. It is part of our cultural heritage and the social life of every community. For those reasons alone, the Minister should listen hard.

[Andrew Griffiths]

I congratulate the hon. Lady on taking part in the all-party beer group’s campaign to get MPs to work behind the bar of their local boozer. I know that she learned a great deal from that. Almost 100 MPs took part in that scheme. Does she agree that that shows how strongly MPs want to support our local pubs and that they value them greatly?

[Joan Walley]

I am grateful for that intervention. Many hon. Members belong to that all-party group and regularly attend its functions. I do not know, Mr Caton, whether you are one of them, but I know that you have many wonderful pubs in your constituency of Gower.

Members of Parliament join all-party groups not just to go along for half an hour or so, but to represent their constituents. They would not be part of such groups or put postcards into a barrel to send to the Chancellor if hundreds of people had not contacted them by e-mail and letter and through local pubs. I have visited many local pubs in my constituency and, as a Member of Parliament, have become involved in resolving all sorts of issues. If he listens to anyone, the Minister should listen to Members of Parliament who have first-hand experience of how important the issue is.

My constituency has 93 pubs and one brewery, and I want to speak on behalf of that brewery—the Titanic brewery. It has won awards and works alongside local pubs. The total number of jobs in the beer and pub sector in my constituency is 1,290, of which 668 are direct jobs and 327 are direct jobs for 16 to 24-year olds. It is very much part of local business. The total value that it adds to the local economy is a grand £32.1 million with £0.9 million invested in the local economy.

I am particularly proud of Titanic, and of Keith Bott and the employees, who play a leading role in the Society of Independent Brewers and have been at the forefront of campaigning for the Government to consider their industry during this economic recession. Times have changed since the escalator was introduced, and the Minister should tell us what progress he has made on the review since the last debate in Parliament back in October or November. I hope that he will give assurances on that.

Titanic plays an important and vibrant role in the life of my constituency. It is 27 years old and has grown from two to more than 130 employees, including 35 jobs in Stoke-on-Trent North alone. I draw particular attention to the Bulls Head, where anyone who wants to taste good real ale goes, particularly before a good football match.

The majority of that employment has been enabled by investment in pubs. It is worth noting that although the hon. Member for Nuneaton wanted to talk about the escalator, the value of the small breweries relief has made an enormous difference to many small breweries all over the country. If ever there was evidence that investment in a sector can bear fruit, it is that small breweries relief, which has made such a difference since its introduction back in 2002. The Government should now go one step further and examine the escalator.

The current policy of increasing duty above inflation may seem to be one way of raising revenue, but the Treasury’s figures show that that is misguided. They forecast a very small increase in duty revenue from this policy—small enough that no additional revenue is predicted. The policy is changing societal behaviour. An unintended consequence of duty increases—we heard about this during interventions—is that more and more people are choosing to drink at home or on a park bench, unregulated and unsupervised, and they are switching from beer to wine and spirits. Part of my career many years ago was working with homeless alcoholics, and I cannot stress enough the importance of having supervised places where people may drink responsibly. Pubs are such places.

This debate is critical not just for small breweries such as Titanic, but for the beer and pub industry as a whole, and the supply chain that contributes to it. Since the introduction of the beer duty escalator, excise duty has increased by at least 20p a pint. Beer sales in pubs and clubs have fallen by 23% and more than 6,000 pubs have closed. Beer taxation now costs the average pub around £66,000 a year. Instead of that, we should be creating more jobs, employing more people, and creating more wealth locally. That is possible if we do not have excessive taxation, which is simply not working in a time of economic austerity. For those reasons, I hope that the Government will listen to what is being suggested today.