Beer Duty Escalator

Heather Wheeler Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

I would never dream of supposing that I knew more than Treasury Ministers, but that would certainly be a good idea to bear in mind for future Budgets. We must look at the economics involved. As I mentioned, there has been a 50% increase in the rate of duty, but only a 10% increase in the amount of revenue.

I have had the great privilege over the past few months of serving on the Finance Bill Committee, where I heard many emotive and brilliant arguments from my hon. Friend the Economic Secretary about the need to get the balance right between the rate of tax and the money it brings in.

[Heather Wheeler (South Derbyshire) (Con)]

I must declare an interest: for 25 or 26 years, I have been married to a brewery man—and thank goodness for Bass and for Young’s. Many pubs in South Derbyshire are still under threat or are going to close, even though the Shardlow brewery, the John Thompson brewery and in particular the Burton Bridge brewery, which has just opened, are fantastic. I should also mention the Brickmakers in Newton Solney. We are trying to do our best, but the yoke of taxation is too high. Does my hon. Friend agree?

[Gavin Williamson]

I entirely agree. I think we have gone too far, and it is having a detrimental effect on the amount of tax revenue the Treasury can get from this important potential source. The Exchequer already brings in £8 billion in tax revenue from the beer and pub industry, but my concern is that that amount will go into slow decline. Already, the Office for Budget Responsibility and Her Majesty’s Revenue and Customs have made it clear that the money coming in from the increase in beer duty is not going to increase. It has not done so in the past year and it is not expected to do so in the next year. We therefore need to look at different ideas. One of them is not to keep taxing. We have had many debates about the Laffer curve and its benefits, but the simple reality is that beer duty is getting to the point where it is too high and it is pricing people out of the market.