Budget Resolutions and Economic Situation

Kenny MacAskill Excerpts

Tuesday 9th March 2021 Commons Chamber

[Kenny MacAskill (East Lothian) (SNP) [V]]

Freezing alcohol duty rates is fine for alcohol producers, but not so good for Scottish publicans. Before covid, there was a drift from on-sale to off-sale consumption both north and south of the border. Something like 75% of sales were for the latter, predominantly in supermarkets, and now it will be even more.

Even once lockdown eases, will people return to their old local or to their pub, or will attitudes change further? Some might say it does not matter, but I actually think it does, and not just for publicans but for communities. It is a difficult time for the licensed trade, but it is also a difficult time for others in our communities. Pubs are community assets in towns as well as in rural parts. We have seen the demise of the country pub, but we now face that on the high street. Dealing with closed shops and what to do with them is difficult enough in towns and villages, but dealing with a pub that is even larger will be much harder, yet that is what we face unless action is taken.

Pubs are also places of supervised consumption. It is much better to have people drinking alcohol where there are ways of ensuring that their behaviour is monitored. Likewise, people’s measures are much more liberal when they are pouring for themselves, rather than having a publican pour them. Indeed, alcohol consumption health-wise, as well as justice-wise, is probably better done in supervised premises. That is why the failure to take any action in the Budget is rather shameful and will harm communities as well as the trade.

We have seen a proposal from the Social Market Foundation that would have allowed for a variation in alcohol duty rates, loading a modest increase on to the off-sale trade to ensure that there could be a reduction for the on-sale trade. That would help keep pubs alive, but it would not reduce the burden required for the Exchequer. Indeed, as I say, given the profits made by many supermarkets, it would probably be seen by most as legitimate and entirely acceptable.

Similarly, there are other attitudes that can be taken on VAT. Italy has reduced VAT on alcohol in pubs and restaurants. Again, that could be revenue-neutral by encouraging increased consumption, but consumption that is better done in a supervised manner, keeps a local asset and maintains a viable business, rather than having people buy tranches of alcohol from supermarkets at discounted prices. That is why, as I say, this has been a missed opportunity.

Pubs are vital for our communities. They are assets, and we have to take steps to support them with either a reduction in VAT, as in Italy, or indeed the more radical steps of the Social Market Foundation, which I would support, to try to secure alcohol being taken in supervised premises, as opposed to simply sold en masse by super- markets at discounted prices. Actions have to change, and this has been a missed opportunity for the pub trade.