Beer and Pub Taxation

Jim Shannon Excerpts

Wednesday 5th February 2020 Westminster Hall

[Stephen Flynn]

It is an important discussion and I will come on to that point. I have been an elected Member in Scotland for a considerable period of time, and what I hear from Conservatives there is that the business rates in Scotland are a complete and utter mess. Having listened to this debate, it appears that they are an even bigger mess in England, if the contributions from Conservative Members are anything to go by.

The important point in the Scottish context, as my hon. Friend the Member for Angus (Dave Doogan) noted, is that Scotland has the most competitive business rates in the entire Isles. Indeed, more than 100,000 businesses, many of them local pubs, are in receipt of the small business bonus, without which they would not survive. In the Scottish Parliament the Conservatives have put that at risk in the last few days. It was only after a dramatic U-turn that they decided to side with the Scottish Government to ensure that the small business bonus was kept in place. That was right, but it should never have been in doubt. With regard to business rates, we in Scotland are well placed to say that we support local pubs and local industry, but there is certainly more that can be done.

One aspect that has not been touched on in enough detail when it comes to taxation is the public health impact.

[Jim Shannon (Strangford) (DUP)]

The cost to the NHS of excessive drinking is clear. Does the hon. Member agree with the sentiments put forward by me and other hon. Members that pubs offer a secure method of drinking? The key is moderation. A landlord can give drivers free soft drinks all night or remove keys from someone who is still standing and talking yet unable to drive. When it comes to the message of drinking sensibly, that is the way to do it.

[Stephen Flynn]

The hon. Member makes an important point, which many hon. Members have also made. That is why we have to take a holistic view. We cannot simply say that taxes need to be cut without looking at the public health impact. Notwithstanding that, a pub is a much safer place to drink than the pre-loading we heard about earlier.

It is important to note that about 22 individuals die every week in Scotland due to alcohol abuse. That is a shocking figure that none of us can be happy about. There has been action on that in Scotland, through the introduction of minimum unit pricing, which is expected to save 392 lives over just five years. We certainly support the reform of beer excise duty, but we need to look at taxation holistically and in terms of public health.

The elephant in the room is the fact that great swathes of our hospitality sector rely primarily on the work of EU nationals. In Scotland, roughly 11% of EU nationals work in the hospitality sector. They are crucial to the success of our pubs, hotels and the entire hospitality industry. That is why Scotland needs freedom of movement, and why it is incumbent on Conservative Members to ensure that when the Brexit deal goes through, free movement of people from the European nations to Scotland continues.

--- Later in debate ---

[Mr Clarke]

I could not agree more, and that is the spirit of Brexit. We need to take advantage of opportunities to drive exports. It is something that we want to do across the piece to ensure that we deliver a successful economy, have a competitive business tax regime and support businesses large and small. That is what the Government have been intent on doing. Our employment allowance changes reduced national insurance contributions by up to £3,000 for over 1 million employers. We have cut corporation tax and frozen or cut beer duty in six of the last seven Budgets, which means that beer duty is now at its lowest level in real terms for over 30 years, and we have repeatedly given support to pubs through the business rates system.

[Jim Shannon]

UKHospitality has said that these businesses represent 10% of UK employment and generate £39 billion of tax for the Exchequer. Does the Minister agree that engaging with the sector would help businesses to survive and to grow?

[Mr Clarke]

The hon. Member is an assiduous attender of Westminster Hall debates, and I am absolutely delighted to say that his persistence will be rewarded. My officials and I will always be glad to engage with the sector.

One of the most important issues that came up in the debate was raised by the hon. Member for St Albans (Daisy Cooper) and my hon. Friends the Members for Devizes (Danny Kruger) and for North West Durham (Mr Holden): the impact of business rates and the associated challenges. Since 1 April 2019, eligible pubs with a rateable value below £51,000 have received a one-third discount on their business rates bills. As my hon. Friend the Member for Totnes (Anthony Mangnall) rightly pointed out in his excellent speech, they will receive even greater support from 1 April as we increase the discount from one third to 50% and introduce a new £1,000-worth of relief for pubs with a rateable value below £100,000. Eligible pubs will be able to claim both reliefs.