Beer Taxation and Pubs

Debate between John Grogan and Liz McInnes

Thursday 28th March 2019 Commons Chamber

[Liz McInnes]

Then it could well have been me who poured his pint.

As the hon. Gentleman has just said, pubs are at the heart of our communities. For me, there is no greater pleasure than going down to my local on a Sunday evening—I try to make it my night off from politics—fending off all the queries about Brexit and what on earth we are all doing in this place, as well as providing a sympathetic ear for the landlord’s often expressed concerns about business rates and the future of his pub.

The facts are simple: pubs are closing at a rate of two to three per day. Our high streets are already struggling from the effects of bank branch closures, post office closures and the rise of online shopping. This is just piling on the problems in the face, I am afraid, of this Government’s increasingly incoherent policy on the future of our high streets. Pubs are being taxed left, right and centre with duty, business rates and employment taxes, as well as full VAT at 20%, while people are shopping online, staying at home and not coming out to socialise with others. This is not good for society, and a healthy pub is the heartbeat of its community.

The Campaign for Real Ale is calling for a fundamental review of the tax system to stem the tide of pub closures. CAMRA welcomes the Government’s business rate relief introduced in the 2017 Budget, but has said recently—just this month—that more action is needed to ensure the survival of the remaining 50,000 pubs. I am pleased that the Treasury is reviewing small brewer’s relief, which hon. Members have already mentioned. I look forward to hearing the results of the consultation, which closed on 17 March.

While small brewer’s relief has been helpful in the start-up of many new micro-breweries, it has also meant a reduction of one third of brewers, such as John Willie Lees in my constituency, which are squeezed between the large international brewers, with huge economies of scale, and the smaller brewers that benefit from a beneficial duty rate. As has already been mentioned, business rates do not help, and many pubs are closing because of high costs.

[John Grogan (Keighley) (Lab)]

Does my hon. Friend think it would be good if the micro-brewers agreed with the family brewers a proposal for a new structure of duty relief that would have weight with the Treasury? SIBA was in contact with family brewers last year, but the talks broke down. Does she agree that if the industry could agree a scheme, that would have considerable weight?

[Liz McInnes]

I think that is a very sensible suggestion, and I hope my hon. Friend has fed it into the consultation. As I have said, I am looking forward to hearing the results of the consultation. I do not want to set up the small brewers against the medium-sized brewers, but I think we need to find a solution to this issue.

We have heard already from CAMRA and the British Beer and Pub Association that for every £3 spent in the pub, £1 goes straight to the taxman. The beer duty freezes in 2017 and 2018 were a welcome measure, after the damaging 3.9% increase in March 2017, but British beer remains overtaxed. Britons pay nearly 40% of all the beer duty paid in EU nations, but we consume only 12% of the beer. The beer duty rate in Germany is 12 times lower than the UK rate. A modest cut in beer duty in the next Budget would create thousands of additional jobs and help to ensure the sustainable future of our surviving pubs. This has been supported by the over 115,000 people who have signed up to the recent Long Live the Local campaign.

Finally, I want to finish with a point that was also made by the hon. Member for Ribble Valley. If the Government were to increase the threshold for lower strength beer to qualify for duty relief from 2.8% to 3.5%, this would stimulate further investment in lower alcohol products and increase the range of low and no-alcohol alternatives available to encourage the healthy social drinking that our pubs—our community hearts—so desperately need.