Taxation: Beer and Pubs

Fiona Bruce Excerpts

Tuesday 31st October 2017 Westminster Hall

[Fiona Bruce (Congleton) (Con)]

Pubs are indeed great community assets, but many face challenges because of the availability of cheap alcohol in supermarkets and off-licences. Cheap alcohol carries tremendous costs to health, too. One particular product, high-strength white cider, causes disproportionate levels of harm and perpetuates deprivation and health inequalities. It is often called the drink of choice for the homeless, the lonely and vulnerable young people, many of whom are on the streets, underage or drinking simply to blot out their problems. It results in death for many who drink it, but it is people’s drink of choice because it is so very cheap.

High-strength cider has developed largely because, as a result of anomalies in the tax system, it has the lowest cost per alcohol unit of any product on the market. A 3-litre bottle of white cider contains 22 units—the equivalent of 22 shots of vodka—and can be bought for just £3.59. The homelessness charity Thames Reach says:

“Super-strength drinks have become one of the biggest causes of premature death of homeless people in the UK, and…are doing more damage than both heroin and crack cocaine”.

Some 78% of the deaths in Thames Reach’s hostels are attributed to high-strength alcohol.

Before I speak about how the Treasury can address this problem, I would like to mention the touching story of one mother, Joanne Good, who came to Parliament in February to tell us about her young daughter, Megan, who went out to a new year’s eve party aged 16 and drank half a bottle—1.5 litres—of Frosty Jack’s. She died in her sleep. These high-strength products should not be available for pocket-money prices. In the light of the Government’s commitment to put social justice at the heart of all they do, introducing a new higher band of duty in the forthcoming Budget that applied to cider with an alcoholic strength by volume of between 5.5% and 7.5% would be a targeted and proportionate response. It would leave the majority of ciders completely unaffected; the vast majority of products subject to the new rate would be white ciders.

There is compelling evidence that altering duty bands can influence consumer behaviour, so I ask the Government to consider increasing the rate for this band of drinks. I am offering them a healthier option. With an increase in tax take, what is not to like?

[Steve Double (St Austell and Newquay) (Con)]

It is a pleasure to speak in this debate; I congratulate my hon. Friend the Member for Dudley South (Mike Wood) on securing it and on his excellent opening speech.

I have the incredible honour and privilege of representing the constituency that contains St Austell Brewery, which since 1851 has been brewing high-quality beer in the centre of St Austell under the ownership of the same family. It now enjoys incredible success and exports a number of its brands around the world.

The three years of beer duty cuts and the subsequent freeze were incredibly positive, not just because of the money they saved on the cost of a pint of beer, but because they sent the brewing industry the clear message that the Government backed it and were behind it. That gave brewers the confidence to plan for the future and invest in products, plant and machinery to grow their businesses and the market. Unfortunately, the rise in the retail prices index earlier this year has undone virtually all the good work of the cut and freeze years and has sent a negative message to the industry.

I encourage the Minister to take back to the Chancellor and the Treasury the strong message that this year we really need at least a freeze in the beer duty, to restore confidence in the industry. We are a Conservative Government, after all; we believe in low taxes, and we know that punitive taxes do not work. Cutting, or at least freezing, the beer duty will allow the sector to continue to grow, with more and more jobs being created.

I must also mention the small breweries’ relief scheme for brewers who produce up to 60,000 hectolitres a year—I did not know what a hectolitre was until a couple of days ago, but there we go. That threshold is clearly acting as a brake on small breweries that prevents them from investing and growing beyond it. Some form of tapering would be very welcome, because we have created a squeezed middle—brewers who are just above the threshold but are paying much higher rates of beer duty. I believe it is time for a review, and I ask the Government to work with the industry to get an overall view of small breweries’ relief and see whether the limit can be increased.

[Fiona Bruce]

Does my hon. Friend support my request that the Minister consider applying small breweries’ relief to cider producers, who do not enjoy that advantage at present?

[Steve Double]

I absolutely agree that cider should be considered for the relief as well.

The Budget gives us an opportunity to send the clear message to the brewing industry and our pubs that we back them, we understand how essential they are and we need to take action to support them.