(3 weeks, 6 days ago)
Commons ChamberI have to be honest that the decisions I have made today are tough decisions. They are not the decisions that I wanted to make, or that I expected to make. Given the seriousness of the inheritance that I face, they are the right decisions, the responsible decisions, and the fairest decisions that I could make in the circumstances.
The legacy of the Conservatives’ new hospitals programme is dire, but the Chancellor will know that there is also a cost to delay. We have life-expired buildings that will continue to need to be patched up until they are replaced, so I urge the Chancellor, as I urged the Secretary of State for Health and Social Care last week, to give the go-ahead to those projects that are ready to go and involve life-expired buildings. Will she review the outdated rules, and allow hospitals to spend more of their capital funds on helping with repairs and rebuilds?
(1 month ago)
Commons ChamberI congratulate the hon. Member for North Durham (Luke Akehurst) on an excellent maiden speech that highlighted the values of equality and fairness—principles that many of us can agree on—and on demonstrating his stamina by being the last Member to be called. With that level of stamina, I am sure that he will give the hon. Member for Strangford (Jim Shannon) a run for his money.
It is an honour to sum up for the Liberal Democrats. Once again, I extend a warm welcome to new Ministers and to our country’s first female Chancellor. I also congratulate new Members from all parties who gave their maiden speeches today. Their speeches did not disappoint; they were poignant, funny and bursting with passion. When I gave my maiden speech in 2019, I was very proud to say that St Albans has more pubs per square mile than anywhere else in Britain, and today’s maiden speeches have given us enough historical nuggets for a maiden speech pub quiz—maybe I will write it on the train journey home.
I am pleased that the topics of economy, welfare and public services have been brought together. Why? Well, during the general election, the Liberal Democrats put health and care front and centre of our campaign, and we did so for two reasons. First, it was the No. 1 issue that constituents raised with us on the doorstep. Every single person is impacted by the crisis in health and social care. Secondly, we know that health creation and wealth creation are two sides of the same coin. We cannot have a thriving economy if our population is sick.
We Liberal Democrats set out an ambitious agenda during the general election, and we are pleased about some of the pledges in the King’s Speech. We are pleased that there will be reform of the Mental Health Act 1983, which is incredibly long overdue, and a number of other public health measures—especially on the protection of children’s health. However, we in this House all know that it is equally important to tackle the social and commercial determinants of health, and tackling child poverty is just as important as tackling the aggressive marketing of vapes and energy drinks. That is why scrapping the two-child benefit limit is in our Liberal Democrat amendment.
It is also important that we focus on access to health and social care services. People must be able to access the care that they need when they need it. That is where the Liberal Democrats want to see more ambition. We need to fix our crumbling hospitals, we need mental health hubs in communities, we need to boost our GP numbers, we need to guarantee that people have a legal right to see their GP within seven days, and we need to put an end to dental deserts.
We all know someone who has had cancer and died, or someone who has had cancer and survived, but in every single year from 2015, the Conservative Government missed their cancer treatment target. We cannot allow that to continue. That is why we Liberal Democrats wanted there to be a legal right—through a statutory duty on Ministers—for this House and the public to hold Ministers to account on ensuring that people can see a GP and get their cancer treatment when they need it.
We Liberal Democrats will also be unapologetic and unrelenting in our focus on social care. We have campaigned for free personal care, and we will continue to do so. Free personal care is good for people’s independence and dignity, and for the NHS. It would also enable the many millions of unpaid carers, who currently pick up the pieces of a broken social care system, to up their hours, do more work, return to work and boost our economy. Health creation and wealth creation are two sides of the same coin.
We look forward to seeing the Government’s employment rights Bill with interest. We Liberal Democrats have campaigned for improved pay for care workers, including by proposing a higher minimum wage starting at £2 more, but that has to come with improved investment so that local government no longer has to rob Peter to pay Paul. We can no longer suppress the pay of experienced care workers to fund improved pay for new starters. We must stop ripping the heart out of a retention strategy just to tackle recruitment. We have to do both.
The King’s Speech was also an opportunity to go further on care. It was an opportunity to introduce paid carer’s leave, make care a protected characteristic, create a royal college of care workers, introduce measures to tackle to scandal of carer’s allowance overpayments, and put in place a framework for cross-party talks that would finally put social care on a firm financial footing for the future. I recognise that the King’s Speech is an opportunity for the Government to set out their priorities, but I hope very much that many of these ideas—particularly for fixing social care—may be announced in due course. As our party leader, my right hon. Friend the Member for Kingston and Surbiton (Ed Davey), has said, the Liberal Democrats will continue to be the voice of carers in this Parliament.
If we want to boost the economy, we have to recognise that there are now several stages to people’s lives and careers. There has to be lifelong learning, upskilling and reskilling from cradle to grave, but we still have to make sure that every child has the best start in life. At the moment under the current system, many children—particularly those with special educational needs and disabilities—are put at a big disadvantage from the get-go, and a huge part of that is SEND funding. As one quick example, my area of Hertfordshire is one of the poorest funded education authorities for SEND. Under the Conservatives’ funding formula, it would take 15 years for children in Hertfordshire to catch up with those in neighbouring Buckinghamshire, itself one of the poorest funded education authorities. That is an entire generation of lost young children and lost education because of a Government spreadsheet formula. It is just another unforgivable legacy of the Conservative Government, and I implore the Labour Government to look at this issue with fresh eyes and real urgency.
Another engine of our economy is small businesses and high streets. Many speakers this afternoon, including many people giving their maiden speech, have talked about the high streets and local businesses that are the glue that hold our communities together. I would like to push the Government to go further, particularly on reforming business rates. Some people may remember that in the aftermath of the mini-Budget, the ex-Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), had spent the summer campaigning for a complete overhaul of the business rates system. On his first day in the job, I challenged him on whether he would in fact review that system. He gave me a wry smile from across the Chamber and said that he regretted campaigning so hard for it from the Back Benches. That review was left in the “too hard” basket; it is part of a long list of challenges facing the Labour Government, unfortunately with a similar refrain, but I implore Labour Ministers not to do the same. Sitting in their in-tray will be the results of the high streets taskforce, which I am sure will confirm what we already know: that the business rates system is broken, crippling high streets—particularly heritage pubs—while Amazon warehouses are being given a tax break. That system is not the foundation of a fair economy.
To conclude, there are measures in the King’s Speech that we welcome, but we want to see far greater ambition for our high streets, our children and our public services, particularly health and social care. We believe that our amendment to the Address goes some way towards addressing those things, and we urge Members to support it.
I call the shadow Secretary of State for Work and Pensions.
(11 months, 3 weeks ago)
Commons ChamberI am absolutely happy to do that, and I agree with my right hon. Friend about the enormous potential of those areas.
Some GP practices are at risk of being priced out of city centres, including in places like St Albans, because of outdated Treasury rules that prevent integrated care boards from spending the money they want to on a GP practice location. Health Ministers have confirmed to me that their officials are happy to work with Treasury officials. May I ask for a personal assurance from Treasury Ministers that they will encourage their officials to look at this and resolve it by the end of this year at the absolute latest?
(1 year, 1 month ago)
Commons ChamberYes, I can. I have written to every spending Minister in the past week. I will be having conversations with them and wider representatives about what can be done differently to drive savings and more productivity from the taxpayers’ money that we spend across Whitehall. To return to my hon. Friend’s previous point, I draw his attention and that of the House to what the International Monetary Fund said. For every additional £25 billion of spending, that is 0.5% on inflation. If Labour’s plan is to spend an additional £28 billion—Labour might say that it will be a bit later on in the Parliament, and it might be an attempt to outwit the Government on the massive leadership that we have shown on green finance and the green economy—that would be inflationary. The shadow Chief Secretary, the right hon. Member for Wolverhampton South East needs to come to terms with that, because the British people will in due course.
Wealth creation and health creation are two sides of the same coin, so it is hardly surprising that the Office for Budget Responsibility has said that economic inactivity has increased as many more people are citing ill health as the main reason for not working. When every single part of our economy—whether farming, hospitality, science or engineering—is struggling to recruit the international talent that it needs, why on earth are this Government about to take this anti-business measure of increasing the cost of recruiting people from abroad through an increased health surcharge, rather than reversing the tax cuts for the big banks, closing the loopholes in the windfall tax and clamping down on tax avoidance, as the Liberal Democrats have called for?
We have got record levels of migration at this time. At the Budget, we set out a clear plan to get more people in this country back into the workplace, with a number of interventions through the Department for Work and Pensions and the health service. We have had to make a fine judgment around those fees in the context of not borrowing any more money. If the Liberal Democrats wish to be taken seriously as a party of government, they will have to make the numbers add up.
(1 year, 2 months ago)
Commons ChamberI am looking forward to answering questions about that tomorrow afternoon at the covid inquiry. We did what was recommended following Exercise Cygnus. Certainly, Ministers did what they were advised to do, but the operation was focused on pandemic flu. The question that we must ask ourselves is why we did not have a broader focus on the different types of pandemic that could have happened, such as covid.
The Government’s business rates review last autumn was anything but fundamental, because it did not even look at the calculations for fair and maintainable trade, which are hammering the viability of pubs in St Albans. If the Chancellor has in fact abandoned his commitment for a fundamental review of business rates, which he himself called for last summer, will he at least look at the calculations for fair and maintainable trade before any more of our valuable pubs have to close?
We conducted a review and put in place the £13.6 billion package of support to help businesses on our high streets. If the hon. Lady is able to look at, for example, the multiplier freeze, she will see that that has had a significant impact on those rates, as has the retail, hospitality and leisure business rates relief, which will help raise the rate of relief from 50% to 75%. We have targeted this very carefully at exactly the businesses that she mentions.
(1 year, 4 months ago)
Commons ChamberThe Minister has talked about the Government’s ambition to simplify the tax system, but he will be aware that the most adversely affected businesses are the port and sherry traders, which will feel the force of a full £20 million increase, despite fortified wine being only 3% of the total wine trade. They have asked for this process to be simplified further by taxing fortified wine at the midpoint of 17.5% ABV. Is that something the Government might still consider?
It is a fair point from the hon. Lady. I do think this is a significant simplification. We are moving from 15 bands to six. I would love it to be 15 to one, but unfortunately “Fifteen to One” is going to remain the name of a quiz programme. If she looks carefully at the new rates—I am more than happy to share a copy of the bands with her—she will see that it is a significant simplification. It provides many benefits to the wine trade, particularly with our differential duty and the small producers relief.
To conclude, I will be happy to respond to the amendments on Scotch whisky at the end, but in the meantime I commend to the Committee clauses 27, 47, 48 and 50 to 60, and schedules 7 to 9.
(1 year, 5 months ago)
Commons ChamberI thank my hon. Friend and I again pay tribute to the hardworking officials from the Treasury and the regulators, and to my colleagues across Government, who pulled together rapidly to deliver this solution. There may be teething issues as the integration takes place, but having spoken to HSBC and the management of SVB UK, they are open for business today and serving their clients. That is the outcome that the Prime Minister and Chancellor were absolutely right to seek in time for this morning’s opening of business.
I would like to press the Minister on his answer to my hon. Friend the Member for Richmond Park (Sarah Olney). At least two tech companies in my constituency were almost affected; I am grateful to the Economic Secretary for acknowledging my urgent letters over the weekend. One of those companies, based in St Albans, moved £200,000 from its US account to its UK account based, in part, on the statements made about SVB being an independent entity, regulated in the UK—statements that bank made to try to give the reassurance that it would not be affected. However, it then did become affected. Will the Minister clarify whether SVB would or should have known that those statements were either incorrect or misleading? If he is not prepared to comment on that particular example, will he commit to a process to look into that issue? Does he believe that there should be consequences in future for banks that make incorrect and misleading statements that put companies at risk?
As I said to the hon. Member for Richmond Park (Sarah Olney), I do not think it is appropriate that I make comments from the Dispatch Box about the veracity or otherwise of statements made by an individual; I hope the hon. Lady respects that. It is, of course, right that anyone in a position of leadership in business takes responsibility and acts in good faith. Although there may well be lessons to be learned in time, the important point is that her constituents and their companies are able to operate, have access to their deposits and continue to do their work of growing important sectors of the economy. I hope the whole House will welcome that.
(1 year, 10 months ago)
Commons ChamberFinally, the prize for patience and perseverance goes to Daisy Cooper.
Thank you, Madam Deputy Speaker; I now know what it feels like to have the knees of the hon. Member for Strangford (Jim Shannon). [Interruption.] It is a fleeting thought, but it has gone.
Pubs and hospitality businesses in my seat of St Albans are really up against it. Suckerpunch is a bar that closed its doors just a couple of days ago because it can no longer continue. Others are clinging on until Christmas and we know that around the country hospitality businesses are saying that they are going to go into complete hibernation until the spring, and that means redundancies. Will the Chancellor confirm that he understands that hospitality is one of the sectors that is most affected and will therefore attract support, and will he look again at the broken business rates system, which is killing our pubs and high streets while letting multinationals off the hook?
Another of the promises I now vainly wish I had not made in the summer as to policies we should do is a fundamental review of business rates, so I have a great deal of sympathy for the hon. Member on that front and I will happily look at those issues. I do not want to promise we are going to make any progress in the next two weeks because there are so many other things we have to consider, but what she has said has been well heard—and I, too, congratulate her on her patience.
(2 years, 1 month ago)
Commons ChamberI am incredibly pleased to be able to speak in this debate. I would like to speak about beer, cider and fortified wine—sometimes known in parts of Westminster as a work event.
The former Chancellor’s relief scheme for draught beer and cider excludes far too many of the small brewers and cider producers that need the most help. The ill-thought-out proposal to impose the 40 litre minimum container size to qualify for help has obviously been dreamt up by someone who has absolutely no knowledge at all about how pubs up and down our country operate. Almost all craft and small batch beers are kegged into a 30 litre container, which is 6.6 gallons for anyone who still wants to reintroduce imperial measurements. A small 4.5 gallon cask for real ale—a pin—holds just 20 litres, and many ciders are delivered to pubs to dispense in 20 litre bag-in-box containers.
Some 34% of licensees stock products in containers smaller than 40 litres to improve beer quality and choice for customers, while 46% of venues said that some products are only available to them in containers of less than 40 litres and one in 10 venues can only stock containers of less than 40 litres as they do not have the cellar space to sell the larger ones. I hope that the Treasury can finally own up to the fact that it plucked this figure out of the air, and instead give small brewers, cider makers and our struggling hospitality industry the break they need. Will the Minister confirm today that the industry will get the much-needed assurance that the threshold will be lowered to 20 litres after all?
I also want to talk about fortified wines because the forthcoming changes to the duty regime will have a significant and arguably disproportionate effect on port producers in particular. In my constituency, I have one of the UK’s leading distributors, Fells—a major employer in my constituency and in Hertfordshire more broadly—which is braced to see a dramatic decline in its sales should this go ahead. Aside from the dramatic price increase that will follow the changes, there are very real and legitimate concerns about the implementation costs and the increased red tape. The system changes, administrative burden and ongoing compliance with such a system will have further negative effects. The Government’s objectives for the alcohol duty reform consultation were welcome. They want to simplify the regime and reduce red tape, but the proposals simply do not do that. For wine, the proposed model cannot be described as simpler. Introducing taxation by degree will be complicated, costly and impractical. Unlike other categories of alcoholic drink, there is a far greater permitted tolerance for the alcohol content of wine made from fresh grapes, meaning that without testing every wine at the point excise duty becomes payable, it is not possible to determine alcoholic strength accurately.
Introducing such a system will disproportionately hit wine-dominant or wine-exclusive small and medium-sized enterprises, importers and retailers, which are an important element of the customer base for my constituency business, Fells. It is requesting that the Government conduct a full and thorough cost-benefit analysis of the impact on the wine sector and that this analysis should be undertaken as a matter of urgency before any such system is introduced. I would be grateful for assurances from the Minister that they would indeed consider running such an analysis.
Additionally, under the current proposals the suggested model penalises warmer climates. There are limited tools available to vineyard managers to keep ABV down to an acceptable degree, and production rules forbid winemakers from removing more than 2% of ABV. I understand that the Minister has met the Wine and Spirit Trade Association; it is also seeking further meetings because it is looking for an assurance that the Government will instead consider a more workable way of taxing wine by applying a flat rate based on 12% ABV for all wine and 18% ABV for all fortified wine.
The Government’s proposals would have a particularly negative impact on the fortified wine business. The total UK market for fortified wine is £311 million. Port accounts for £82 million of that, and Fells in my constituency is the leading UK importer and distributor. The Government proposals would add £1.09 duty to a bottle of port, resulting in an 11 % increase on the average price per bottle. Fells estimates that in such a highly price-sensitive market this increase could lead to an 11% decline in sales, or approximately 1 million bottles per annum. Fortified wines such as port and sherry are generally not consumed irresponsibly; they are bought and consumed at festive occasions, to mark exams and graduations, weddings and anniversaries, and at Christmas—they are an occasional treat. But we are in a cost of living emergency when treats are often the first things to go, and therefore this regime could have a huge impact on this market. So I ask the Government to think again, to consult more and not rush this through, and to do that cost-benefit analysis.
Overall, the alcohol duty reforms proposed by the Government just tinker around the edges in dealing with the pressures facing hospitality. We have a broken business rate system that penalises pubs, restaurants and high street shops. We have spiralling energy costs which remain uncapped for small businesses. We have food inflation and labour shortages. I ask the Government to seriously consider bringing forward a proper plan to protect British brewers, distillers, winemakers and their distributors.
My hon. Friend is absolutely right. PubAid estimates that pubs up and down the country contribute more than £100 million every year to charitable activities and community causes, and a further £40 million for grassroots sports in our constituencies, so they really are forces for good in our communities.
As my hon. Friends have said, our pubs, brewers and many other parts of the sector have long been over-taxed. UK pubs and brewers are taxed around 20 times more than US tech companies, as compared by their turnover. They are taxed around five times more than UK gambling. The UK has one of the highest levels of beer duty in Europe—behind, I think, only Finland and Ireland—which is 10 times that of Germany. Taken together, our pubs and brewers contributed over £10 billion in tax last year, even in reduced market conditions—£1 in every £3 spent in a UK pub goes straight to the Treasury. I am sure the Minister is very grateful for that, but I am also sure that Members recognise the disadvantage and burden that places on responsible places for people to drink responsibly and in moderation, compared with the opportunities that supermarkets in particular and other off-trade retailers have to sell their products far more cheaply, with far fewer employment costs and far fewer responsibilities to regulate who they are selling to.
Does the hon. Gentleman agree that it is an absolute travesty that about 10,000 pubs and restaurants could be lost if there are not more fundamental reforms to the tax system that affects UK hospitality? Many say that the pressures they face now are even worse than those they faced during the pandemic. Does he agree that we need to go much further than just having the alcohol duty reforms?
There has been a long-term trend away from drinking in pubs and on-trade, and towards supermarket sales making up a greater share of the market. Some of that will be due to natural changes in consumer preferences and people’s lifestyles, but we should not allow the tax system to aggravate such trends, which have real social and economic consequences. Where we can tweak the tax system to make sure that our pubs, brewers and other producers get a fairer deal and where we can reduce some of the disincentives to people consuming drinks in well-regulated public houses, we should do so.
I welcome the alcohol duty review, which is a massive step forward. The level of duty, which is much higher than in most comparable countries, is compounded not only by VAT, but by extremely high business rates. I hope that we can look at how our system of local business taxation can be further modified. The Treasury has clearly been piloting attempts to charge digital and online companies. That is an important starting point, but we need to make sure that our taxes on clicks are comparable with our taxes on bricks, to help sectors that have to operate in the real world. Nobody has yet established a viable virtual pub. A few people tried during the pandemic, but I do not think that any of those experiences quite worked out. It is noticeable that in April and May last year, most people were quick to get back to the real thing rather than using the online equivalent.
On the duty review, the proposed reforms are hugely welcome, particularly the banding that recognises the progression through alcohol strengths, so that higher-strength drinks have, if not quite exponentially more, progressively higher levels of duty compared with low-strength drinks. The changes to the low-alcohol band for beer for 2.8% to 3.4% will make a big difference to the availability of good-quality, lower-alcohol beer. Brewers find it relatively simple to change recipes to bring a 3.6% or 3.7% real ale down to 3.4%. It is much easier than getting a recipe down to under a 2.8% threshold without changing the character of such drinks, although I agree with my right hon. Friend the Member for Vale of Glamorgan that 3.5% would clearly be preferable, if we are looking at those details.
Similarly, the proposals for small brewers relief are hugely preferable both to the system that we have and to the Treasury’s initial proposals, which would have caused a lot of difficulties for relatively small breweries. I accept that the changes will take a while to get our heads around—that is probably putting it lightly—but the current system has a distorting effect, with sharp edges that act as a very strong disincentive for growth and that impose an unnatural plateau at about 5,000 hectolitres. That means that unless businesses are confident that they will grow significantly beyond 5,000 hectolitres, they have very little incentive to invest in the extra staff and the extra capital to do so. The system that has been proposed is far better. It is very noticeable that what for a long time was probably the most contentious issue in the beer sector has now brought people together: although there are some details that each person might like to change, the overwhelming majority in the sector now feel that they can live with it.
I suggest that the Treasury look at whether it might be possible to extend some form of small producers relief beyond beer and cider, to include small wine producers. That would have particular benefits for English wine producers, and of course for Welsh wine producers; I must say to the SNP Front Bencher, the hon. Member for Gordon (Richard Thomson), that I do not know the scale on which Scottish wine producers are operating at the moment, but I imagine that they mostly fall within the smaller category.
The differential draught beer duty rate that the then Chancellor, my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), announced in his Budget last autumn is a fantastic proposal. It has the potential to make a big difference to supporting responsible beer drinking in our pubs, cafés and bars, instead of our supermarkets and—let us be honest—our park benches, town centres and street corners.
The difference will depend on the scale of the differential. The 5p differential is a good start in establishing the principle, but getting a new system up and running is likely to mean that almost all of it will be retained by pubs and breweries. That will typically mean an additional investment of about £2,000 being available to pubs, but if we want our consumers and beer drinkers to benefit from the draught beer duty rate, the differential will need to be widened. Only once it gets to 10p or 15p will we start to see a real difference in what customers pay for a pint at the bar, which will also make a difference by encouraging people to drink on regulated premises instead of buying from the off-trade.
We would like to see the differential not only increased but introduced at the first available opportunity. I know that the Treasury was looking at introducing something in probably the spring of next year, but given the difficulties that we all know the hospitality sector has had over the past two years or so, if a suitable fiscal event or financial instrument could be found that would allow the measure to come into force before this year’s Christmas season, that would make a massive difference. It would help the pubs that the hon. Member for St Albans (Daisy Cooper) referred to, which may be struggling, on the edge of going under or just about managing to stay afloat through the winter. Bringing the differential in early would make a big difference.
There has clearly been a very lively debate about container size; 20 litres is very obviously the correct answer. Having had discussions with the last Chancellor and the last Economic Secretary, my hon. Friend the Member for Salisbury (John Glen), I think they recognised that 20 litres was where we needed to end up. I very much hope that incoming Ministers will reach the same conclusion. I think that the last Chancellor broadly accepted the argument that 40 litres was probably not the right container size for the threshold: he was pictured with the Prime Minister holding 30-litre containers to launch the policy. The 20-litre level will make a big difference to the range and types of beer that can be made available, particularly for our smaller brewers. However, I also think we should look at the provisions on distribution mechanisms, and ensure that containers do not necessarily have to be connectable to either a gravity-pulled or an electrically pulled draught system. When it comes to the pins of the kind typically seen at beer festivals in all our constituencies, where there is just a tap in the side of a barrel, I think that applying the discount to a container of over 20 litres makes a good deal of sense. Brewers I have talked to estimate that less than 0.1% of their beer is sold through those taps. We are not risking a massive distortion in the market from people buying huge numbers of these containers for parties at lower rates of duty, and applying this to all containers of over 20 litres would constitute a minimal cost to the Treasury.
The system introduced a few years ago in Australia does have a requirement involving connectors, partly because the Australian market is very different and partly because there is a much lower threshold—from memory, I think it is as low as 8 litres—but I think that a provision for 20 litres would capture virtually all the beer that almost all the small brewers that we are trying to support supply through our pubs and our licensed premises, and that they would benefit. I therefore hope that the Treasury will settle on that, as the obvious figure, in its final decision.
Once again, I thank my right hon. Friend the Member for Vale of Glamorgan for securing the debate. I also thank the Treasury for all the discussions that we have had over the past couple of years, particularly since the publication of the duty review. We look forward to the speedy introduction of these measures so that our brewers, our publicans and UK hospitality as a whole can benefit, succeed and thrive.
It is a pleasure to respond to this debate and I congratulate my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing it. It has been good to hear from hon. Members across the House and from the chairs and members of very important all-party groups on this subject.
It is very clear that my right hon. Friend is an ardent advocate for producers and traders in his constituency. Indeed, Wales has an historic association with alcohol production going back 4,000 years and today produces many ciders, beers and wine. My hon. Friend the Member for Meon Valley (Mrs Drummond) also talked about the producers in her constituency.
As many Members have mentioned today, we are making changes to outdated, arbitrary and inconsistent alcohol tax laws. These reforms will make the system fairer, simpler and more aligned to public health goals than the system that we inherited from the EU. As the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) said, these are significant reforms that we are making.
Before addressing the excellent points that have been raised today, I want to remind Members of the major changes that we are making to improve the duty system. Reform of our alcohol tax laws is long overdue. These laws have barely changed since the 1990s. That is largely because incoherent and prohibitive EU rules have, in the past, hindered much-needed change. In the current system, a high-strength white cider will pay less duty per unit than a low-strength beer. Sparkling wine—a product of which the UK has world- leading examples—pays much more duty than still wine, even when it is substantially less strong. Fortified wines are made with the addition of spirits, and yet they pay less duty than a liqueur made with spirits, even if they are the same strength. We have inherited 15 rates from the EU across five different products, and with three different methods of taxation.
The current system is complex and archaic. The Institute of Economic Affairs said that it “defies common sense”. Producers, importers and exporters in this country have called it “distorted”,
“perversely incentivised to produce stronger drinks”
and welcomed “the opportunity for reform”. We agree. Now that we have left the EU, we have an opportunity to create alcohol laws that are more rational and that support the many and varied producers and traders in this country that we have heard about today.
I wish to take this opportunity to remind everyone of the significant benefits that have been introduced with our reforms: a radically simplified system, slashing the number of bands from 15 to six and taxing all products in proportion to their alcohol content; taxing all products in the same rational way, a policy banned by EU law; and ending the premium rates on sparkling wine and equalising them with still wine, and substantially reducing duty on rosé. We have introduced new rates for low-strength drinks below 3.5%, encouraging innovation and reflecting consumer preferences for the low or no-alcohol market, and we are cutting duty on 3.4% beer by 25p a pint. We have modernised the taxation of cider, targeting unhealthy and problematic white ciders while cutting the duty for lower ABV craft and sparkling ciders. We have introduced small producers’ relief to support the many small, artisan alcohol producers who continue to create world-leading products in this country. Those are benefits that would not have been available to us before we left the EU.
Can the Minister clarify which specific EU regulation was preventing us from enacting duty reform?
There are many laws in the EU, as the hon. Lady will know, that have dictated our laws for many years. Those are the regulations and directives that we are changing, not only in this area, but in many others.
Coming back to the system we are producing, we ran a consultation from after the autumn Budget until January this year and Treasury officials have met many stakeholders from across industries and public health groups. The hon. Lady said that we need to consult more, but I can assure her that Treasury Ministers, largely the former Exchequer Secretary to the Treasury, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), who was responsible for this area, have met colleagues from across the parties. We have spoken to and visited businesses, from the smallest to the largest, welcomed representations from many of the most important trade bodies and sat down with the Australian high commissioner, all to ensure that at the Treasury we have heard all points of view on the reforms. I can assure the hon. Lady and others that we are listening.
I will come on to the points that hon. Members have made. We have heard from industries, businesses and colleagues about their concerns, and we will continue to listen to the feedback. The comments made in this debate will form part of that listening. We are actively thinking about how we can reduce burdens on businesses while still preserving the many benefits of the system, not least the clear and obvious public health benefits of taxing products by their alcohol strength.
Many hon. Members have talked about issues with keg size, including my right hon. Friend the Member for Vale of Glamorgan, my hon. Friends the Members for Meon Valley and for Dudley South (Mike Wood), and the hon. Member for St Albans (Daisy Cooper). I want to assure them that, while I cannot make any announcements today, we are listening to that point. My right hon. Friend the Member for Vale of Glamorgan, my hon. Friend the Member for Dudley South and others talked about how small producers’ relief is too complicated. I reassure them that we are determined to get rid of the cliff edge to support the growth of small brewers.
Other hon. Members talked about the duty charges on wine. I have spoken to the former Exchequer Secretary, who told me how she has been engaging with the sector on this very issue. The hon. Member for St Albans mentioned that she had visited the Wine Society and heard its views, and I know the Treasury is looking at ways to reduce the administrative burdens.
The hon. Lady also talked about fortified wines; she will know that we are reforming the duty on fortified wines to ensure that those products pay a consistent rate of duty per unit with still and sparkling wines and high-strength beers. We are increasing the duty on fortified wines to equal the duty on spirit-based liqueurs such as Baileys, because both drinks are made using spirits and we think it is right in those circumstances that they pay the same rates.
My hon. Friends the Members for Weston-super-Mare (John Penrose) and for Meon Valley talked about cider, as did others, and I hear what they are saying. They will know that ciders will benefit from new reduced rates for lower ABV ciders below 3.5% ABV, and as part of our new draught relief we will cut duty rates on draught fruit ciders by 20% to equalise them with beer, cutting 13p off a pint. Nobody has mentioned this today, but I would like to reiterate that we announced in the 2021 autumn Budget that we were freezing cider duty for the fourth consecutive year.
The hon. Member for Gordon (Richard Thomson) talked about Scotch and other spirits. I remind him that at the Budget the Government froze spirits duty, saving 52p off a bottle of Scotch compared with what it would have been if duty had risen with inflation. Because of the decisions that we have made, spirits duty rates are at their lowest level since at least 1918. It is a really important industry for us and we have an exceptionally competitive environment for Scotch to succeed. Domestic whisky volumes have expanded year on year, including throughout the pandemic, to reach their highest levels since 2013, growing by 11% over the past two years.
(4 years, 1 month ago)
Commons ChamberI shall use my three minutes to talk about three of the essentials in life: jobs, homes and pubs.
First, on jobs, before covid, the creative industries were worth £100 billion to our economy every year and were one of the fastest growing sectors. Many of the 3 million who have been excluded from Government schemes are freelancers in the creative industries. The creative industries also lose out on £55 million every year because of how the apprenticeship levy is structured. It is too rigid and does not respond to this flexible dynamic industry. I urge the Government to reform the apprenticeship levy, so that it supports the ecosystem of freelancers who serve the sector as a whole.
Secondly, on homes, I welcome the plan to start insulating homes, but we must also make them safe. I say this as a member of the Fire Safety Bill Committee who has been looking line by line at the first piece of post-Grenfell legislation. We need a much higher level of ambition and funding to make homes not just warm, but safe, and I encourage the Minister to look at creating some of the very first new jobs and apprenticeships in the fire safety sector, so that homes can be warm and safe.
Thirdly, on pubs and restaurants, as the MP for St Albans, I will never tire of saying that we have more pubs per square mile than anywhere else in the UK and I will use every opportunity to remind the House of that. I welcome the VAT cut that has been announced today, but we also need to turbo-charge the business rates review. We must level the playing field on VAT for the long-term between the on-trade and the off-trade. I urge the Minister to keep an open mind on one-off, tailored, bespoke extensions of furlough where it is needed, because some of our pubs are being asked to renew leases for five or 10 years. They need to know that they have the Government support to make it through to next spring. Finally, I urge the Government to publish the long-overdue code of practice for the leased pub industry that has been promised.