Beer Duty Escalator

Debate between Marcus Jones and Andrew Griffiths

Tuesday 5th March 2013 Westminster Hall

[Mr Marcus Jones (Nuneaton) (Con)]

It is a pleasure to serve under your chairmanship, Mr Caton. I am delighted to have secured this topical and most important debate in the run-up to this year’s Budget. Since I was elected to the House, I have taken part in a number of debates of this kind, and they are usually extremely well attended. Despite the fact that there are huge pressures on parliamentary time this morning, given the plethora of Select Committees, it is good to see how many hon. Friends and Members are here to support this debate. Given the debate title, I intend to keep to the narrow issue of the beer duty escalator, and I urge colleagues to do likewise. Just as none of us would want our beer watered down, I do not want us to temper our arguments by being distracted from the issue of beer duty.

I will set out a simple, clear case for why the beer duty escalator should be scrapped and beer duty should not be increased in the forthcoming Budget. In making that case, I will discuss the impact of the escalator on the beer and pub industry and the negative effect that the escalator is having on our economy and communities across the country. I will also discuss the positive story that our beer and pub industry has to tell and the reasons why that industry should not be compromised by further rises in the already excessive beer duty rate.

In the UK, 30 million adults drink beer each year and 15 million visit the pub each week. From my postbag, I know what an important issue it is for many of my constituents. Campaigns organised by the Campaign for Real Ale, the British Beer and Pub Association, the Society of Independent Brewers, the National Farmers Union, the TaxPayers’ Alliance and The Sun newspaper have captured the spirit—I probably should not use that word in a debate on beer—of public opinion. The campaigns have chimed with the breadth of public opinion on the subject, and the strength of feeling involved has been expressed by the 108,000 people who recently signed an e-petition calling for the beer duty escalator to be scrapped.

From my postbag, I know that popping down the local for a pint is becoming more and more expensive and out of reach for many of my constituents. Incomes have been squeezed over the past five years or so, and the cost of a pint has become more and more unaffordable. Beer is fast heading towards being a luxury item.

On the economic impact of the escalator, the beer and pub sector is vital to our country; nearly 1 million people across the UK work in the industry. Some 46% of those are younger people aged 16 to 24. The beer industry is also a true success story for British manufacturing: 87% of all beer consumed in this country is made in the UK. If only we could do the same for other products that we consume, our economy would be far more balanced. That is one reason why we should encourage the beer and pub industry and the manufacture of great British beer in our country.

[Andrew Griffiths (Burton) (Con)]

I congratulate my hon. Friend on the speech that he is making. The pub industry is a fantastic way to get young people into work, give them work experience and teach them the business model. Does he not agree that supporting the pub trade is a fantastic way to tackle our problems with youth unemployment and young people not in education, employment or training?

[Mr Jones]

My hon. Friend is absolutely right. Young people can enter the beer and pub industry at the bottom by pulling pints behind the bar, an extremely important role, and work their way up within companies to become managers or work for pub companies and breweries. It can be an extremely fulfilling and constructive career for many. We should encourage the industry to take on more and more young people.

The Future of Pubs

Debate between Marcus Jones and Andrew Griffiths

Thursday 9th December 2010 Westminster Hall

[Andrew Griffiths]

I thank my hon. Friend for that intervention. His commitment, effort and determination to stand up for the British pub are laudable. I was fortunate to spend a few hours with him at the British beer festival, and there is no doubt that he is a big supporter of the brewing industry.

There is an elephant in the room that we have not yet discussed. We debate the impact of the tie, and whether it is good or bad to have so many pubs in the tie. My hon. Friend the Member for Leeds North West (Greg Mulholland) referred to Punch Taverns, and I am delighted that Burton is the home of brewing. It is where Bass, which used to be the world’s No. 1 brand, was developed, and we are still the home of Marston’s Pedigree and Carling Black Label. We even brew Cobra for anyone who likes beer with their curry on Saturday night. It is the home of the National Brewery Centre, and I urge anyone who has a spare hour to come to Burton and enjoy the delights of that reopened centre, which gives a fantastic insight into our brewing heritage and history. Burton has a proud heritage of brewing, and we are what we are because of our brewing history. However, we want the brewing and pub industries to have a bright and exciting future.

Punch Taverns has been through many difficulties over the years. I recently met Ian Dyson, the new chief executive who has just taken over. I was reassured to discuss his plans for the future of Punch Taverns at some length, and in particular his desire to work with his tenants, support them and focus on their needs. The company has learned many of the lessons that other pubcos perhaps still need to learn. Because of that, I hope for both Burton and Punch Taverns that the future is bright.

What we are missing is a change in people’s drinking habits. Hon. Members may be surprised to learn that 70% of all alcohol sold in this country is sold through the off-trade and supermarkets, and we cannot ignore the impact that supermarkets have had on our drinking habits. The smoking ban is a problem, and there is no doubt that supermarkets have capitalised on that and used their might to drive down the price of alcohol on supermarket shelves, particularly beer. That has had a major impact on the viability of pubs. Let us be honest: pubs will survive if publicans can make a fair living.

[Mr Marcus Jones (Nuneaton) (Con)]

My hon. Friend makes a good case on behalf of the pub industry. Does he acknowledge that in addition to the difficulties caused by low-cost selling and the special offers by large supermarkets, the huge increase in beer duty under the Labour Government—around 26% over the past two years—has had a very detrimental effect on the pub industry? That has widened the gap between the purchases that people make in off-sales and those they make at the local pub.

[Andrew Griffiths]

My hon. Friend, as always, makes a valid point. In fact, the figures are worse than he suggests. Under the previous Government, duty on beer increased by 60%, while the increase on spirits was just 15%. That differential has had a huge impact on the viability of the British brewing industry. It is no surprise, as hon. Members from all parties will realise, that as a result of 13 years of Scottish Chancellors, the Scotch whisky industry has not, unfortunately, suffered the same increases in duty as those suffered by the British beer industry. I hope that the new Chancellor and the coalition Government will be more supportive of the brewing industry and our pubs.

It is encouraging that last week the Treasury announced innovative and well-thought through proposals on what I call “smart taxes.” The idea is to increase tax on bad things and reduce it on good things. Reducing taxation on lower-strength beers and spirits and increasing it on higher-strength drinks would support the vast majority of the British brewing industry and help to nudge people—we all know the phrase “the nudge approach”—towards choosing a more responsible and healthy drink when they go out for a tipple on Friday or Saturday night.

We must do something about the change in people’s behaviour and their drinking habits. When I was elected, one of the first things I did was spend a Friday night with the local police in Burton. I was with them from 6 o’clock in the evening until 3 o’clock in the morning. We walked the streets and I went out with them as they dealt with the consequences of people who had had too much alcohol in what the Daily Mail likes to call “Drink-fuelled Britain”.

I am not a young man, but I am not an old man. I remember when I used to go out with my friends for a night on the town, a night on the pull. [Laughter.] We were more successful at drinking than we were at pulling, unfortunately. We would go out for a night on the town and we would probably meet at about 8.30 pm. We would have a couple of drinks and then head to a nightclub to try our luck with the ladies of Dudley. The nightclub would close at 2 o’clock, and that would be the end of our evening.

As hon. Members will know from their own high streets, young people now go out much later. I saw that they were not going out on the streets until 10 or 11 o’clock in the evening and when they arrived, they were already half-cut. As the phrase goes, they had “pre-loaded”. While at home, they drank alcohol that they had bought from supermarkets at cheap prices. That is the heart of the matter and something we must address if we are to offer real support to the pub trade.

While there is a vast differential between the off-sale price and the price at which pubs are forced to sell their drinks, people will always drink at home. If one can buy 24-packs of strong lager, or a can of lager in the supermarket that is cheaper than a can of Coca-Cola, that is the biggest nudge of all.

Small Businesses

Debate between Marcus Jones and Andrew Griffiths

Tuesday 7th September 2010 Westminster Hall

[Andrew Griffiths]

I draw my hon. Friend’s attention to a recent case in my constituency, where a large brewing firm unilaterally decided—with no negotiation or discussion—to extend its terms of credit from 30 to 90 days, which had a massive impact on some very small businesses. We talk a lot about corporate responsibility, and although larger businesses need to operate in a tough economic climate, they also have a responsibility to smaller supply businesses, which often rely on tight terms of credit to survive.

[Mr Jones]

I thank my hon. Friend for his comments. He is absolutely right. The same comments are coming from small businesses in my constituency.