Beer Duty Escalator
Debate between Chris Ruane and Richard Drax(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Richard Drax (South Dorset) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak in this debate. It is a pleasure to be tail-end Charlie, and to follow the hon. Member for North Cornwall (Dan Rogerson).
Richard Drax
In that case, I am probably the gunner instead.
It is a great sadness to me that a great friend of mine, David Woodhouse, who was the boss of a brewery in Dorset, has died before the beer duty escalator was removed, as I hope and believe that it will be. Aged 49, he died prematurely of a heart attack. This tax was one of his main concerns, fears and worries, because, sadly, every time it went up, he had to lay people off.
The beer duty escalator provides the perfect illustration of the law of diminishing returns: the higher the duty, the lower the volume of beer sold. Yet despite the evidence, brewing has been cruelly lumbered with a 2% above-inflation increase every year since 2008. That means a 27% increase in beer tax in the life of this Parliament alone. Beer taxation now costs the average pub about £66,000 per year, with 35p in every pound taken over the bar being passed on in taxes, most of them duty, and while beer prices have risen, sales have fallen sharply by 23%. Over 6,000 pubs, or thereabouts, have closed, and a pint of beer is, sadly, fast becoming an unaffordable luxury. In fact, the Office for Budget Responsibility forecasts very limited additional revenue from beer tax in the next two years, and the wider costs—the loss of jobs and reduced VAT and corporation tax payments—have not been accounted for.
In my constituency, more than 2,000 people are employed in the brewing and pub trade. They form a small but vital part of the quarter of a million people who work in the sector in rural constituencies. The Dorset brewery that I mentioned, Hall and Woodhouse, has just invested £5 million in a new brewery, which will safeguard more precious jobs. Its reward? Yet more duty on a pint of beer. In the struggle for growth, how can it make sense to strangle this vital part of the UK economy?
Pubs have historically been a focal point for a community—a place to meet, eat, drink and socialise. Our naturally brewed ales are world renowned, and pubs are high on every tourist guide’s must-see list. Smaller, tenanted pubs, in particular, are suffering, and each new rise in duty is nothing less than a kick in the teeth. We are penalising one of Britain’s oldest and most cherished industries. This is not a recipe for growth—something that this Government have banged on about day after day—nor is it fair. As we have heard, UK consumers now pay 40% of the total EU beer tax bill, yet we consume only 13% of the beer. I could argue that perhaps the EU officials are guzzling too much, but that would be facetious. We are driving people out of pubs, where, in the main, law-abiding citizens consume a low-alcohol drink in a controlled environment.
I see that my time is running out because, being the gunner, we are now down to four minutes. I shall therefore end by making this appeal to the Minister: on behalf of the breweries and all those in the business, not least in my constituency, and my friend David Woodhouse, who has sadly passed away, please get rid of this dreadful tax.