Beer Duty Escalator

Debate between Greg Mulholland and John Denham

Thursday 1st November 2012 Commons Chamber

[Mr John Denham (Southampton, Itchen) (Lab)]

I am very pleased to have an opportunity to speak in this debate, and I commend the Backbench Business Committee on securing it. When I was briefly Secretary of State for Communities and Local Government at the end of the last Labour Government, we appointed my right hon. Friend the Member for Wentworth and Dearne (John Healey) as the first pubs Minister. His 12-point plan has been mentioned today, and it still sets the agenda on issues such as the community right to buy, the need to change the planning rules, and the relationship between pub companies and pubs. I am very pleased to have a chance to return to this issue today, prompted by not only the wider concerns, but the fate of one pub in my constituency that illustrates some of the wider problems.

The Castle pub in Midanbury in Southampton has been sold by Enterprise Inns to Tesco, which has just put in a planning application for the minor changes needed to develop a convenience store. That is deeply unpopular with the 600 people in the area who signed a petition against the move, partly because they did not want to lose the pub and partly because they do not want a Tesco. They have been utterly powerless to influence the decision, however.

Similar situations have been described by other Members. The latest figures I have from CAMRA show that its members have identified 189 conversions of pubs to supermarkets since the start of 2010, with a further 41 pubs under serious threat. Of those 189, Tesco has done 124 conversions, while Sainsbury has done 21.

In my constituency, in addition to the Castle pub, the Bulls Eye in Sholing and the Woodman were also owned by Enterprise Inns and are being converted by Tesco. Other pubs have been sold to the Co-op, the Best-one convenience stores, the Alfresco group and the One Stop group.

Beer duty is one of the factors contributing to this trend. Because it impacts on the profitability of pubs, for the big pub companies considering what to do about a pub it is one of the factors that tips the balance away from investing in it and strengthening the management and towards simply seeing selling the pub as a property deal, which is often what those capital-hungry companies are after. The bigger picture is of communities such as mine being left without any say when two giant companies —Enterprise Inns and Tesco in this case—have commercial strategies that they work on together and which suit them, but that give local people no voice and no say at all in the future of their pub and community.

[Greg Mulholland]

I congratulate the right hon. Gentleman on raising this serious problem. It is a tragedy to see our local pubs being turned into supermarkets. What is happening is predatory purchasing. I will send the right hon. Gentleman the Save the Pub group planning charter, which addresses this issue. I ask all Members to urge the community pubs Minister to make simple planning law changes to give communities the right to have a say, and to stop the nonsense of no planning permission being required for supermarket conversions. That would stop the collusion the right hon. Gentleman mentions between the giant indebted pub companies and the giant supermarkets. What is currently happening is certainly not an example of the big society.

[Mr Denham]

I commend the hon. Gentleman on his work on this issue. What he says is right. In the case I have mentioned—and, I suspect, in many others—there was never even an open disposal. There was never an opportunity for somebody else to come in and start up a microbrewery for instance. The whole thing takes place behind the scenes, and the deal is done. The first thing the community ever knows is that the property has already changed hands and is on the way to being converted.

[Greg Mulholland]

There are huge growth opportunities in the pub sector. Many pubs are being taken on by small pub companies, and their figures show they are doing well. The managed pubs sector is doing perfectly well. Lots of small breweries around the country are also buying pubs, but they are often prevented from doing so because of the situation the right hon. Gentleman describes. This can be solved through the planning system, and it must be, or else growth in the sector will be hampered.

[Mr Denham]

The hon. Gentleman again makes a fair point. I say to the Treasury Minister on the Front Bench, the hon. Member for Bromsgrove (Sajid Javid), that in addition to reviewing beer duty and changing the planning laws, the way in which these big companies operate needs to be looked at.

The hon. Member for Bristol North West (Charlotte Leslie) talked about the big society. We cannot have a big society if two big companies shut the community out. Labour Members talk about responsible capitalism; it is not responsible capitalism if big companies collude to stop small entrepreneurs starting up businesses of the sort we want to see in our communities.

In every one of the cases I have raised where a Southampton pub has been turned into a convenience store, that pub offered a safe, social environment for the responsible consumption of alcohol, and it was replaced by an off-licence that trades on cheap booze. I am not saying nothing ever goes wrong in a pub, but there are social constraints on how much people drink and how they behave. If the outcome of public policy is that we lose the places where alcohol is consumed responsibly and replace them with outlets for cut-price booze that encourage people to drink too much at home, where those constraints might not exist, there is something wrong with public policy. The message from Members on both sides of the House is that the Government need to look at beer duty and the wider context.

The Minister on the Front Bench and other current Treasury Ministers, along with previous Treasury Ministers over many years, have all said—because this is in the word processor in the Treasury—that it is difficult to untangle the impact of beer duty from the other factors affecting pubs. Of course that is true, but that is no reason for not looking at beer duty and all the other factors affecting pubs.