Pub Companies

Debate between Brian H. Donohoe and Andrew Griffiths

Tuesday 21st January 2014 Commons Chamber

[Andrew Griffiths]

I am certainly open to the idea of an adjudicator. My question is, who pays? It is estimated that the administration of an adjudicator could cost £1 million, which is a huge amount of money to take out of the beer and pub economy. Who is going to pay for what could be described as just another piece of red tape and Government regulation?

I genuinely ask the Minister why she would want to sit in judgment on rent disputes or other commercial or contractual disputes between two businesses, especially when effective mechanisms are already in place that are unique to the pub sector, independent and funded by the industry. I ask her to consider carefully the Office of Fair Trading’s report to the consultation. It clearly expressed the view that the tie is not distorting the market, and states that the proposed intervention could result in a breakdown in economies of scale, leading to an increase in rents and prices that would affect tenants and consumers. I also urge the Minister to consider the report from London Economics, which her own Department requested. It suggests that more than 2,400 pubs could close as a direct result of the proposed intervention in the market.

The reality is that many pub companies are nursing pubs because they cannot find a tenant or buyer for them. The proposed economic model would mean that those companies would have to free themselves of those pubs, which could lead to thousands of pubs closing in a very short time. I ask the Minister: why regulate? Is there a consumer issue involved? Not according to the Office of Fair Trading. Would regulation help the smaller brewers? Certainly not, according to the Society of Independent Brewers. That organisation represents the micro-breweries. We have heard people rejoicing today that those breweries have flourished and blossomed. There are now 1,000 micro-breweries operating in this country as a result of the progressive beer duty introduced by the previous Government—I commend them for that—so why would we want to interfere in the market, given that those brewers have clearly stated that to do so would prevent their access to the market?

[Mr Donohoe]

I used to run a licensed premises myself, so I understand what the hon. Gentleman is saying, but he has not really addressed the issue before us today. Why are so many pubs closing? Why, in his opinion, is that happening?

[Andrew Griffiths]

I think that you would become apoplectic, Madam Deputy Speaker, if I were to wax lyrical on why pubs are closing. We all know that it is due to changing social demographics, to the fact that people are spending more time at home, to the drink-driving laws and to the supermarkets. There are many reasons—[Interruption.] And, yes, the smoking ban. The hon. Member for Central Ayrshire (Mr Donohoe) gesticulates as though he is puffing on a cigarette. I completely agree with him on that point. The previous Government introduced the smoking ban and, at a stroke, closed thousands of wet-trade pubs without putting in place any support for the pubs or the industry. He has pointed out another unintended consequence of legislation. It was a good idea that we stopped smoking in pubs—they have a nicer environment as a result—but the unintended consequence was that many of them closed.

The danger is that we repeat those mistakes in the proposed regulation. We would not expect McDonald’s franchisees to be able to sell Kentucky Fried Chicken products because they thought there would be more profit in doing so. Why, then, should we want a Marston’s pub to be forced to sell other people’s beer as a result of the proposed regulation?

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[Andrew Griffiths]

I completely agree with my hon. Friend. The previous Government increased the duty by 60% during their time in office, and it is no wonder that 9,000 pubs closed on their watch as a result.

[Mr Donohoe]

I recall a previous debate on beer, which I think was led by the hon. Gentleman. I made an intervention on that occasion to ask about whisky and other spirits. It is now known that spirits account for 40% of the sales in pubs, so would he include them in his calculations, as well as beer?

[Andrew Griffiths]

The hon. Gentleman will also be aware that the vast majority of a pub’s income comes from the sale of beer. We brew beer in this country; it is something that we are fantastic at doing. It is a British product—

[Mr Donohoe]

Whisky is as well.

[Andrew Griffiths]

Of course, and whisky is a great product, but the hon. Gentleman will also know that the whisky industry is growing and that the vast majority of that growth is coming from exports, whereas the beer industry is in decline, and beer is produced and sold uniquely in this country.

I recognise that I am in the wilderness here, but I urge the Minister, colleagues and all Members who are considering how to vote in this debate not to introduce red tape and regulation that will force more pubs to close and create a further decline in the great British pub.

Beer Duty Escalator

Debate between Brian H. Donohoe and Andrew Griffiths

Thursday 1st November 2012 Commons Chamber

[Andrew Griffiths (Burton) (Con)]

I beg to move,

That this House welcomes the essential contribution of brewing and pubs to the UK’s economy in providing one million jobs; notes the 42 per cent increase in beer duty since 2008 and HM Treasury forecasts that have shown that there will be no additional revenue generated from beer duty despite planned increases over the next two years; is therefore concerned about the effectiveness of this policy in tackling the Budget deficit, its impact on valued community pubs and the continued affordability of beer in pubs; and therefore urges the Government to support the UK’s beer and pub sector by conducting a thorough review of the economic and social impact of the beer duty escalator to report back before the 2013 Budget.

I begin by thanking the Backbench Business Committee for giving us the opportunity to debate this important issue on the Floor of the House. I know from the number of e-mails and telephone calls that I have received that publicans, brewers and people in pubs up and down the country are tuning into the Parliament channel to listen to the debate, such is their level of interest. I commend the Backbench Business Committee for giving us this opportunity.

Colleagues will know that the debate is a result of the fact that 104,000 people have signed a petition demanding the scrapping of the beer duty escalator and calling for the issue to be debated on the Floor of the House. I congratulate everybody who took the time and opportunity to familiarise themselves with these issues and sign in support of their pubs and breweries. Of course, 104,000 signatures do not appear overnight. I pay particular tribute to the work of the British Beer and Pub Association; CAMRA, the Campaign for Real Ale; SIBA, the Society of Independent Brewers; and brewers such as Hobgoblin, which has done so much to raise the profile of Britain’s brewers.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

I must declare an interest as secretary of the all-party Scotch whisky and spirits group. This issue affects Scotch whisky as well as beer. The whole whisky industry employs some 34,000 people in this country, and they are being affected too. Will the hon. Gentleman include them in his plea to the Government to look again at the escalator?

[Andrew Griffiths]

I completely understand the hon. Gentleman’s wanting to defend an important industry in his constituency, but I gently point out to him that the Scotch whisky industry had a 10-year freeze on duty under the previous Government, that 95% of Scotch whisky is exported, and that spirits have now become the drink of choice for young people across the country. I am making the case on behalf of the brewing industry, which has been so badly served.

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[Andrew Griffiths]

My hon. Friend has put his finger on the nub of the problem. I want to remind the House that when the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), introduced the beer duty escalator he said that,

“as incomes have risen, alcohol has become increasingly more affordable…In order to ensure that alcohol duties keep pace with rising incomes, alcohol duty rates will increase by 2 per cent above the rate of inflation”.

[Mr Donohoe]

Will the hon. Gentleman give way?

[Andrew Griffiths]

If I could finish my point, I will then give way. The reality is that since the introduction of the beer duty escalator in 2008, beer duty has increased by a crippling 42%.

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[Andrew Griffiths]

The hon. Gentleman makes a valid point. We should consider the impact that the beer duty escalator has had on our brewers.

[Mr Donohoe]

Will the hon. Gentleman give way?

[Andrew Griffiths]

I would like to make a little progress, if I may.

Since the introduction of the beer duty escalator, beer sales have reduced by 16%. To put that in perspective, it is the equivalent of the loss of 1.5 billion pints as a result of the beer duty escalator. To put it another way, it is the equivalent of one major brewery in our country closing every year since the introduction of the beer duty escalator.

[Mr Donohoe]

Will the hon. Gentleman give way?

[Andrew Griffiths]

The hon. Gentleman is quite exercised, so I will give way to him.

[Mr Donohoe]

I am very grateful to the hon. Gentleman for giving way. Will he reconsider his previous answer to me? Scotch whisky is the heaviest taxed of all the spirits, beers, ciders and wines in this country. [Interruption.] It is the heaviest taxed.

Fuel Prices

Debate between Brian H. Donohoe and Andrew Griffiths

Tuesday 15th November 2011 Commons Chamber

[Andrew Griffiths]

That point will not be lost on the House.

Something else that will not be lost on the House is the fact that this coalition Government took the bold steps to reduce fuel duty, to bring in the fair fuel stabiliser and to look at what we can do to help rural businesses. That is hugely important.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

rose—