Pubs Code: Guest Beers

Gareth Snell Excerpts

Tuesday 12th November 2024 Commons Chamber

[Justin Madders]

I absolutely do thank my hon. Friend for that intervention. He has obviously heard that I am quite easily tempted into Strangers. It is a very important part of the facilities that the Strangers Bar offers Members the opportunity to serve guest beers. It is a great opportunity to plug great local businesses.

Small independent brewers often reflect their local area in their products, from locally sourced ingredients to their marketing, branding and style. The resurgence in brewing in the UK over the last decade has strengthened awareness among the general public of local beers, whether it is the new-style craft beers or independent breweries resurrecting well-loved local beers that had been lost in the consolidation of larger breweries.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The Minister is quite right about the importance of local brewers. Stoke-on-Trent’s own Titanic Brewery serves a wonderful pint of plum porter in Strangers now and again. It is not just about the products they sell, although if they were able to access guest beer lines they could grow their business and create more jobs; it is also about the story they tell about the history of who we are. Titanic is so-called because Captain John Smith was from Stoke-on-Trent. That is often missed in our cultural storytelling: breweries are doing a great job of exporting who we are and what we are around the country and around the world.

[Justin Madders]

I thank my hon. Friend for his intervention. That is a really important point. It is an essential part of our culture and a real selling point for us around the world. When people come here, they want to visit a traditional English or British pub, and we have a different style in every part of the country. The point made earlier by my hon. Friend the Member for Carlisle about some of the larger breweries now mimicking the local brands is an interesting development, which shows that imitation is the best form of flattery.

More generally, we know there are challenges for the hospitality sector, which is still struggling to recover from the pandemic. The subsequent cost of living crisis has compounded the challenge for pubs, increasing costs and the ability of businesses to repay debts. This is an ongoing struggle. Our system of business rates is particularly unfair on high street businesses. It disincentivises investment, creates uncertainty and places an undue burden on our high streets. That is why the Government are undertaking a review of the business rates system, to ensure that all businesses are paying their fair share, recognising and addressing the fact that high street businesses, including pubs, have shouldered the majority of the burden for far too long.

In her Budget, the Chancellor announced that the Government are freezing the small businesses multiplier for 2025-26 to protect small properties from inflationary bill increases, and that retail, hospitality and leisure businesses will receive 40% relief worth up to £110,000 per business. This support package alone is worth over £2.2 billion over five years. It was also announced in the Budget that the Government would reduce the alcohol duty on draft products. This will reduce businesses’ total duty bill by up to £100 million a year and increase the duty differential between draft and non-draft products from 9.2% to 13.9%, so that a pint in the pub attracts less duty than the beer in the supermarket.

The Government will also increase the cash discount provided to small brewers and producers for non-draught products and maintain the current cash discount provided to small producers for draught products. This in effect increases the relative value of small producer relief for both draught and non-draught products. Jobs, too, lie at the heart of our plans, backed by the Employment Rights Bill, which had its Second Reading earlier this month, and local growth plans will be a cornerstone of the place-based approach. We have heard already about the importance of pubs in the local economy.

Turning more specifically to the guest beers consultation announced in the Budget, the Chancellor said that the Government will consult on ways to ensure that small brewers can retain and expand their access to UK pubs and maximise drinkers’ choices, including through provisions to enable more guest beers.

At this point, let me echo the support for the work done by the Society of Independent Brewers and Associates and the Campaign for Real Ale in championing beer drinkers’ choice and pursuing the case for more independently produced beer in pubs. We will work closely with both those organisations, but also with the wider hospitality sector, to identify barriers to market access for small brewers and how they might be addressed. I want to ensure that we have a clear understanding of the current position, and of what interventions may be necessary and the impact of those interventions.

We want to find the right solutions to help small brewers gain access to the market, but to do that we will need to understand all the issues and ensure that any interventions are proportionate, that they address the problems, and that they do not result in unintended consequences. For instance, we will want to develop a good understanding of the extent to which tied tenants use existing flexibilities, by, for example, buying beer from small brewers through their pub companies on payment of a tied release fee. We will want to understand whether managed and retail pub chains could or do offer local beers, to understand the scope for increasing the provision of local beers in other licensed premises such as restaurants and hotels; and to understand the barriers preventing local brewers from gaining access to more pubs, and the reasons for those barriers. There are a range of issues that we will want to consider as part of the consultation. I can respond to my hon. Friend’s questions about what we would consider by saying that we are ruling nothing out at this stage, and that we intend to take a holistic view of the sector.

The next statutory review of the pubs code is due to take place next year, but it is only one part of the picture, as it applies to only about a fifth of all pubs in England and Wales. As has been mentioned, there is to be an interesting development in Scotland, whose pubs code will include a guest beer provision. That does not necessarily mean that the provision will automatically be transported to England and Wales, but it also does not mean that we would not be interested to see how it pans out—although, as it will not be introduced until March 2025 at the earliest, we will need a bit of time to understand how it works. We will be able to consider that as part of the consultation, and we will, of course, consult formally on all the options available to us to increase small brewers’ access to the market. It is important for us to get a handle on the complexities of the market before we undertake the consultation. We will work with SIBA and CAMRA and will engage with a range of stakeholders in the pubs and wider hospitality sectors before consulting on options.

In response to the questions about when this will happen, I can say that we will try to get on with it as soon as we can, but we do want to undertake that work before launching the formal consultation. We understand the points that have been made and the good intentions behind the suggestions that we have heard, but we want to ensure that this works for the industry as a whole.

Let me end by thanking my hon. Friend for initiating her first Adjournment debate. I look forward to working with her on these issues in the coming months, and I will certainly be taking up her offer of a drink—although, owing to diary constraints, I will probably do so on premises closer to the Chamber than to her constituency.

Question put and agreed to.