Beer and Pub Taxation

Dave Doogan Excerpts

Wednesday 5th February 2020 Westminster Hall

[Dave Doogan (Angus) (SNP)]

I thank the hon. Member for Dudley South (Mike Wood) for securing the debate. Is not it interesting that it is so well attended, and that we are all in such accord on one issue? I think it will be a long time before we find another one on which we are in such accord.

None of us has a monopoly on fantastic breweries and pubs in our constituencies, and that fact signifies the key importance of the issue. The debate, by my reckoning, focuses on two principal issues: one is the fairness of taxes that breweries and pubs face, and the disproportionate burden they must support; and the other is the value of pubs. To begin with the second issue, the pub, as many hon. Members have pointed out, is a venue for solidarity between members of communities—particularly small communities, or communities within larger conurbations. It is an opportunity for company for the isolated, and it provides opportunities for entrepreneurial advancement, whether artistic or in micro-brewing and other things. Notwithstanding any of those softer, more pastoral benefits that pubs generate for communities, they also generate £23.1 billion for the economy, which is not to be sniffed at either.

It seems to me there is something important for the Government to do. First, they need to admit that there is a problem. By the calculations of the Office for National Statistics, 11,000 pubs—23% of the entire estate—closed in the past 10 years. I think that we would all pretty much recognise that that signifies a problem that we need to deal with. We need to take a collective look at the burden of rates, VAT and duty on pubs. I am pleased that pubs in my constituency and elsewhere in Scotland benefit from the most competitive rates regime in these islands, but that is no help to anyone in England, Wales or Northern Ireland—so there is work to be done there.

I am not sure whether we should touch on the question of VAT, but we should touch on duty. In the research that I undertook to prepare for this speech, I could find only Ireland and Finland ahead of the UK, in the European context, for beer duty. I cannot speak for Finland, but I know that Ireland is also wrestling with a pub closure problem. A yawning gap between the price of on-sales and off-sales in the UK is feeding directly into the pressure on pubs. As many hon. Members have pointed out already, off-sales products are much more attached to the more harmful types of drinking—particularly lone drinking. Also, something that I believe is now popular with younger people is pre-loading before going out. I do not know anything about that, but it is definitely associated with problems of excessive consumption, leading to matters of public health concern, and to public order concern when things get a little out of control. If we do nothing else by coming here, I join colleagues in other parties in their pleas to the Minister to take a serious look at beer duty. I hope it will be reduced. Many of our brewers need that, and many pubs will not survive without it.

--- Later in debate ---

[Mr Clarke]

I am a big fan of the Castle Eden brewery. As a fellow north-easterner, I used to pass it regularly. Treasury policy is to avoid precipitate cliff edges that distort behaviour. Clearly, I cannot pre-announce any of the findings of the review. There are a range of factors and representations that need to be borne in mind, but we will issue clarity to the sector in the next few weeks.

[Dave Doogan]

I appreciate what the Minister says about prior notice, but will he take a look at the disproportionate effect of tax on on-sales compared with off-sales? It is unsustainable, notwithstanding the issues of public health, public nuisance and community support.

[Mr Clarke]

I take the hon. Member’s point. Clearly, we want to support drinking in social settings such as the pub. It has clear societal benefits as well as business benefits, and the Treasury takes that into account.

The Treasury keeps all taxes under review and is deeply sensitive to the range of challenges facing the pub sector and brewery sector, which we are keen to support. The support of all hon. Members present is powerful, and it speaks to the fact that this is a decision we need to get right. I know that all hon. Members will keep us under close scrutiny about the decisions we make.

I thank my hon. Friend the Member for Dudley South for securing the debate. What has happened today is a great tribute to his leadership on these issues, and he deserves our thanks.