Beer Duty Escalator

Iain McKenzie Excerpts

Thursday 1st November 2012 Commons Chamber

[Sandra Osborne]

I thank the hon. Lady. Another problem is that when many of the small pubs that employ only a few people close, that is not highlighted. With bigger announcements about redundancies, it is always made clear that huge job losses are involved, but I would argue that this is just as insidious for those working in the smaller pubs.

I recognise concerns about alcohol-related harm and the serious problems that alcohol causes, of which we are very aware in Scotland. I recognise, too, that campaigners have called for some time for the Government to introduce a duty rate escalator on alcoholic drinks as part of a wider strategy to tackle the social impact of alcohol consumption.

[Mr Iain McKenzie (Inverclyde) (Lab)]

My hon. Friend makes an impassioned point about the alcohol problems that continue to be encountered in Scotland. Pubs are more sociable places for the consumption of alcohol and are more family friendly nowadays, but what we are seeing is the mass purchase of alcohol in supermarkets for home consumption.

[Sandra Osborne]

That is very true, and I think we should give some credit to UK pubs which they have made great efforts to be family friendly places where people can drink with the assurance that there will be no problem if they take their children with them. That is important.

I share the concern that continued increases would penalise only responsible drinkers and, as stated earlier, drive responsible social drinkers out of pubs and into supermarkets because the price of alcohol is increasing in pubs but decreasing in supermarkets. The current duty system ensures that higher-strength drinks are the cheapest drinks available to consumers. Pubs are already being hit hard by the current economic situation and are suffering further with the escalation of beer duty.

On 23 March 2012 the Government published their alcohol strategy, which seeks to reduce the UK’s relatively high drinking levels and the serious health and disorder problems that are caused by excessive alcohol consumption. The strategy contains a number of proposals to

“reshape our approach to alcohol and reduce the number of people drinking to excess”,

including the introduction of a minimum unit price. As Members will know, minimum pricing has already been introduced in Scotland, but is currently being challenged in court by the Scotch Whisky Association.

Following a recent Adjournment debate, a Minister said that abolishing the escalator would cost the Exchequer £35 million in 2013-14, and that that revenue formed

“a vital part of the Government’s plan to tackle…debt”.

However, the Government would

“continue to keep all taxes under review and monitor the impact of alcohol duty”. —[Official Report, 2 July 2012; Vol. 547, c. 733-36.]

I ask the Government to recognise the tough challenges that face the beer and pub industry, and to take them into consideration. I think it would be a good idea for the Government to cut VAT temporarily and to undertake a wider reform of the industry, including the introduction of a statutory code to regulate pub companies. The last Labour Government introduced a 12-point plan to support community pubs, which was backed by CAMRA, and my colleagues on the Opposition Front Bench have pressed the Government to build on it.

As we have already heard, there is an online “Stop the beer duty escalator” petition, which currently has 104,000 signatures. I ask the Government to note that significant number, to support the country’s beer and pub sectors by conducting a thorough review of the economic and social impact of the beer duty escalator, and to announce before the 2013 Budget that they will abolish it.