Beer Duty Escalator

Greg Mulholland Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

My hon. Friend is not known as a visionary—I believe that his new wife often refers to him thus—for nothing. I hope that the Minister is noting his ideas eagerly, and will recommend them to the Treasury as a host of examples of radical new thinking that could improve and support our breweries and pubs.

[Greg Mulholland (Leeds North West) (LD)]

I congratulate my hon. Friend on securing this debate, and assure him that his cause has the full support of the all-party parliamentary save the pub group.

Pubs pay even more tax per pint because of the other forms of tax to which they are subject. I fully support my hon. Friend’s proposal—indeed, I think that a separate duty should apply to real ale, which requires an increased cost of production and increased cellarmanship—but there is also a problem with European legislation. Rather than saying that we should not challenge that legislation, should not Ministers convey to Europe the message that it could do something important that would greatly help not only our brewing industry but our pubs?

[Gavin Williamson]

It is always welcome when a Liberal Democrat speaks so vociferously against the European Union. I thank the hon. Gentleman, who has fought so hard for pubs not just in his constituency but throughout the country.

Almost 1 million jobs in the United Kingdom are generated by the UK beer and pub industry, which affects all our constituencies, including that of the Economic Secretary to the Treasury, my hon. Friend the Member for Norwich North (Miss Smith). Some 550 people work in the industry there, and I am sure that, like the rest of us, my hon. Friend wants the number to increase.

--- Later in debate ---

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

I must take the opportunity, after that last reference, to invite hon. Members to drink at the Iceni brewery in Norfolk, at which I am sure they would be extremely welcome.

I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing the debate. It has been interesting and I thank him and all hon. Members who have contributed tonight. It will not be a surprise, as I have the rather thankless task of being the final speaker tonight at this late hour, if I suggest that he can buy us all a drink when we have finished. I am sure he can do that.

In all seriousness, I want to compliment my very fine brewing and drinking city of Norwich. I regularly go into pubs—indeed, I drink the odd beer—I run politics in the pub surgeries and my local newspaper also runs a very fine “Love your local” campaign, so I am very much in tune with the spirit of what we are discussing tonight.

I regret to say that I must turn to the burdens about which my hon. Friend spoke and do my duty in providing some background on my hon. Friend’s proposal to end the beer duty escalator. As hon. Members will be aware, the inflation plus 2% annual increases were first announced in the 2008 Budget by the previous Government and were extended in the March 2010 Budget. Those pre-announced increases applied to all alcohol types, not only beer, and the additional revenue from the increases was included in the public finance projections at that time. Let me put some numbers on that for your edification, Mr Deputy Speaker. The value of removing the escalator would be £35 million for 2013-14 and £70 million after that.

[Greg Mulholland]

Does the Minister not accept that beer has been treated particularly unfairly when compared with spirits and cider? Ludicrously, the global cider producers who knock out mass-produced products, often not using British apples, pay half the duty even of the smallest micro-brewers on the lowest small breweries’ relief rate. That is simply not fair.

[Miss Smith]

I hear the hon. Gentleman’s argument and pay tribute to him for his work with his all-party group. Let me answer his question with the main question posed at the end of the speech made by my hon. Friend: I would of course be happy to meet hon. Members who are present tonight to discuss these matters further.

There are many points to go into—more, I regret to say, than I have time for. The key point that I must make first is that the duty increases that we are talking about—the increases through to 2014-15—form a vital part of the Government’s plan to tackle the debt left by the previous Government. It would be worse for everybody if we did not tackle that debt. When I say “everybody”, I mean beer drinkers, cider drinkers, spirit drinkers, wine drinkers, brewers, publicans and, of course, all those who never touch a drop. The high interest rates that would result if we abandoned our credible plan to tackle the deficit would not help anybody.