Commission on Race and Ethnic Disparities

Debate between Liz Saville Roberts and Kemi Badenoch

Tuesday 20th April 2021 Commons Chamber

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC) [V]]

Diolch yn fawr iawn, Mr Dirprwy Lefarydd. While of course the commissioners must be respected, their report should undergo scrutiny. They say they did not find conclusive evidence of institutional racism in the areas examined. Dr Robert Jones of Cardiff University provides Wales-specific evidence that 36 black people in every 1,000 experience stop and search, compared with five white people; that 91 black people for every 10,000 are in prison, compared with 14 white people; and that prison sentences for black people stand at an average of 30 months, rising to 35 months for mixed people, compared with an average of 20 months for white people. To what other institutional factors does the Minister ascribe the greatest part of those disparities? Will she work with the next Welsh Government to implement Plaid Cymru’s manifesto commitment of a race equality action plan to address this issue?

[Kemi Badenoch]

I thank the right hon. Lady for her question. I think I should again clarify what the commission says on the existence of racism. It states:

“Overt and outright racism persists in the UK. Examples of it loom larger in our minds because we witness it not just as graffiti on our walls or abuse hurled across our streets,”

but even in private settings.

On the over-representation of minority groups in stop-and-search, the commission looks at the causes and at where stop and search happens. It happens in London, which is where the vast majority of ethnic minorities live, compared with the rest of the country. That does have an impact on the data. The commission also puts forward recommendations on things we can do to build trust in the police to reduce the number of stop-and-searches that are required. I have forgotten the second point that the right hon. Lady raised, but I think it was in a similar vein.

Discrimination is not explained by disparities alone. Sometimes it is the case; sometimes it is not. Where it is the case, the commission has identified that; where it is not, it has put forward other potential explanations.

Small Breweries Relief

Debate between Liz Saville Roberts and Kemi Badenoch

Monday 9th November 2020 Commons Chamber

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

I congratulate the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) on securing the debate, and thank right hon. and hon. Members for their contributions to it.

In recent years, the UK has been home to something of a craft beer renaissance. Time-honoured brewing methods that were slowly starting to disappear have gained a new lease of life. Customers have benefited from an exciting and far wider choice of beers and ales, while the number of small brewers has increased tenfold over the past three decades. The craft brewing trend is an international phenomenon that predates small brewers relief, but the relief has undoubtedly helped to encourage new breweries to enter the market and compete against larger and more established businesses.

The layperson may therefore wonder: if the relief is seemingly so effective, why are the Government reviewing it? The answer is simple: because the industry asked us to. As hon. Members may be aware, small breweries relief is not uniformly popular in the brewing sector. In fact, the beer writer Martyn Cornell once suggested that a surefire way to start a fight was to mention the subject at a brewers convention.

[Liz Saville Roberts]

It was to be anticipated that the Minister would mention the industry’s requests, but what the industry requested was that the cliff edge be addressed. When addressing the cliff edge, there is no reason to reduce the 50% rate below 5,000 hectolitres. That does not affect the cliff edge; it just moves it.

[Kemi Badenoch]

I disagree. It does affect the cliff edge: a taper smooths it out and stops the point at which growth is actively discouraged.

Two main charges are levied at small brewers relief by its critics: that it unfairly distorts competition and that it fails to match the true nature of industry production costs. It is argued that that penalises the best producers, inhibits growth and disrupts normal business activity. I should point out that those criticisms were made not by the multinationals that dominate the global market, but by local and mid-sized regional brewers. As hon. Members might imagine, no two brewers will agree on absolutely everything, but a lack of consensus should not be a barrier to action where it is required.

The Treasury therefore announced in 2018 that it would review the relief to consider the views of the whole market on the topic. Since then, we have considered a range of evidence, from direct submissions from individual breweries to independent academic research. We will publish more information about the evidence that we have received as part of our upcoming consultation on small brewers relief later this year.

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[Kemi Badenoch]

I will no longer give way to the hon. Gentleman. I have answered the question of who this should benefit.

On why we are converting to a cash basis, brewers provided feedback that the relief was not tracking their true production costs and was increasing in value in real terms. We also know that the amount spent on the scheme has increased significantly. The right hon. Member for Dwyfor Meirionnydd spoke about 2002. It was £15 million then; it was £65 million in 2019, even while brewing volumes have declined. A cash basis conversion allows us to review annually the value of the relief, meaning that we can track it in line with changes to industry costs.

[Liz Saville Roberts]

I ask the Minister to consider the point that the cash basis is at the heart of the uncertainty that breweries are telling us about. They do not know whether it is worth investing in the here and now. I know that Cwrw Llŷn, for example, is prepared to invest, but the shift from a percentage basis to a cash basis means that breweries have no certainty from year to year what sort of duty they will be paying.

[Kemi Badenoch]

I take the point the right hon. Lady makes, but the Treasury is not doing this to squeeze small brewers. We are not making any money from it either. The reason we are doing it is that industry has asked us to do it, and not the multinationals or large brewers. There is a dispute that we are settling, and we believe that the cash basis will improve things.

The right hon. Lady is right to mention uncertainty. I think the answer is for us to move at pace to give business certainty, not to postpone the uncertainty about what we will do on this relief even further into the future.

A point was made about mergers. As hon. Members are aware, when two brewers merge, their entitlement to small breweries relief changes. Many brewers complain that this distorts business activity, as mergers become unviable. My predecessor in this role, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), has given examples of businesses that have not been able to grow. We need to look at the industry in the round, not just at those who fit a particular demographic.

I reiterate that we listened to many small breweries. We listened to a wide range of breweries and reviewed copious evidence related to SBR. I cannot tell Members how many pages and pages we went through in the consultation that just happened, and there is even more consultation coming. We met the Society of Independent Brewers, the Small Brewers Duty Reform Coalition and the British Beer and Pub Association about this issue, and officials and I continue to meet all those stakeholders. The Treasury ran a survey in 2019 that received 335 responses, as I mentioned. I am afraid that the industry is simply divided on this issue. The idea that all small brewers have the same perception of the relief is misplaced.

My hon. Friend the Member for Broxtowe (Darren Henry) spoke about small brewers falling through the cracks, as did my right hon. Friend the Member for Basingstoke (Mrs Miller) and others. We do recognise that. Small brewers are able to benefit from our unprecedented coronavirus response, which includes the job retention scheme, VAT deferral and bounce back loans, as hon. Members will have heard many times before. We have also acted to allow brewers whose beer was spoiled due to pub closures to reclaim excise duty more easily. However, brewers have been able to sell alcohol throughout this period, and thanks to schemes such as CAMRA’s Pulling Together campaign, more than 800 breweries have moved to offer online sales for collection or delivery for the first time. The Treasury is keeping the support it offers to businesses under review as the pandemic progresses.

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[Liz Saville Roberts]

I think the Minister will agree that the feeling among Members of Parliament is very strong and is cross-party. We would all greatly appreciate the opportunity to discuss this matter in a different register to that which can be used in the Chamber. Will she consent to that?

[Kemi Badenoch]

I am very happy to offer a meeting to a number of Members across the House. This should not be a contentious issue. We may have been written to by certain constituents, but we represent many more people than those who have complained about this issue. If we do offer a meeting, I hope Members will talk to all the breweries, not just the ones who have complained, to get a holistic view of what is going on in their constituencies.

The hon. Member for Strangford (Jim Shannon) talked about pub business rates. We have offered lots of business rate relief. We know that breweries have not been included, but that is partly because they have been able to open. It is an issue that we continue to review.

What are the next steps? The Treasury is moving forward with a further consultation this autumn to examine the more detailed aspects of reform. I invite all hon. Members to encourage any breweries in their constituencies to engage with the process. This is necessary because taper reform is very complicated. It seems like there are as many suggestions for new tapers as there are brewers in the country. That is what we need to focus on. It would not be prudent for the Government to simply pluck one of these solutions out of the air without giving brewers an opportunity to comment on its implications. I should stress that the Treasury has not made any final decisions about the overall shape of reform.