Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill

Mike Wood Excerpts

2nd reading & 2nd reading: House of Commons
Friday 11th September 2020 Commons Chamber

[Mike Wood (Dudley South) (Con)]

I shall keep my comments rather shorter than planned because I see how many Member still hope to speak, and I join those who have congratulated the hon. Member for Cardiff North (Anna McMorrin) on introducing this Bill. I introduced a private Member’s Bill five years ago, shortly after I was elected, and I know that although Members quickly become among the most popular people on earth when their names are drawn from the ballot, that popularity, and so much of the glamour, suddenly wears off once the title of the Bill is published and non-governmental organisations, charities and campaigning groups no longer have quite so many reasons to phone, email, and make Members feel wanted.

I must declare an interest because I am a member of Midcounties Co-operative, although the House may not be entirely surprised to learn that, unlike the right hon. Member for Wolverhampton South East (Mr McFadden), I am not yet a member of the Co-operative party. Who knows? There is still time, but Members should not hold their breath quite yet. We can, however, agree that co-operatives are a force for good in many communities up and down the country. I know that the Economic Secretary to the Treasury has put forward that view for many years, as has his colleague, the Financial Secretary to the Treasury.

As businesses that are owned and run by members, the decision-making process in co-operatives is important, and I am instinctively sympathetic to many principles that the hon. Member for Cardiff North seeks to advance in the Bill. The global challenge of climate change, and changes to our environment at global and local level, are some of the most pressing challenges of our time, and they must be addressed at all levels. As has been said, there is a clear need for action at Government level to support investment in environmentally sustainable and green schemes. Five years ago, the London Stock Exchange became the first stock exchange in the world to launch a green bond segment, which it followed last autumn with its green economy mark and sustainable bond market. That was to find channels, generally at larger company level, to support investment in businesses that are pursuing many of the environmentally sustainable goals that the hon. Lady sets out in proposed new section 29A.

There is a role for community vehicles, and co-operatives and community benefit societies are in a strong place to fulfil much of that, generally as lower-scale vehicles that conduct practical work at community level. It is therefore right to look at where legislative and regulatory restrictions prevent such work. Some ideas are raised in the Bill that I very much hope, if the Bill is not successful today, the Government will take away to see how they can be brought back in a form that can be progressed. There are some shortcomings in the Bill that would cause concern and that have, as was referred to earlier, attracted concern from much of the co-operative movement, while generally strongly supporting the need for legislative support.

Without repeating what the Minister said, much of it comes back to the wish both to advance a vehicle for green investment through co-operatives and to introduce some of the fundamental reforms of co-operatives, in measures on tax loopholes and the obstacles to conversion into companies. Clearly, those two issues are related, but they are quite distinct. In trying to tackle them both in the way set out in the Bill, there is a danger of not quite doing either well—of either being too restrictive or too extensive.

As a Midcounties Co-operative member, I am instinctively somebody who thinks that the best way of making decisions over a mutual organisation is for the members to have the power to take those decisions. I am not convinced of the pressing need to have legislative measures to prevent the conversion, but if there is evidence of high risk or severe harm it seems that it probably applies to co-operatives more generally, rather than simply those that could be taking advantage of these green share provisions. That needs to be addressed more broadly for co-operatives and community benefit societies, rather than as part of a measure that predominantly concerns financial vehicles.

Similarly, I share many of the views that have been set out on whether restricting the Bill to purely green shares—to environmentally sustainable investments, rather than other socially beneficial ones that co-operatives in particular, and other community benefit societies may wish to facilitate—is potentially too restrictive. There is a danger from a consumer protection point of view that by confining it narrowly it almost acts as an accreditation scheme for the investment, in a way that neither the Government nor the Treasury is really in a position to be accrediting any such scheme more generally.

Hon. Members on both sides of the House will have plenty of experience of the anger of many of our constituents who may have been Lloyd’s names, and who felt that the Government—or, rather, successive Governments—failed to intervene adequately. If we are legislating in such a narrow way to allow for a specific type of investment that we approve of, adding apparent Government backing to them carries real risk of financial losses, where the liabilities could be enormous.

Many years ago, while I was working for a sustainable energy membership organisation, I was involved in helping to conduct a very large piece of work on behalf of the then Government on green investment, particularly on household-generated energy, looking at incentives, attitude to energy and what might make the difference in consumer behaviour. While even then, more than a decade ago, there was clearly a lot of appetite among consumers to support the green agenda, it did come down to an expectation of a financial return in actually quite a short timeframe. I think that the majority of people who may be interested in investing through vehicles such as those the hon. Member for Cardiff North is looking to facilitate will have a similar expectation of a decent return on a relatively short-to-medium timescale. We would have to ensure that such vehicles were financially sound as well as pursuing a clear environmentally and socially beneficial agenda.

I will leave it there, because other hon. Members will wish to speak. I know my hon. Friend the Economic Secretary to the Treasury will have been listening to the support for co-operatives and vehicles to allow for such environmentally supportive investment, and I hope the Treasury will look at how we can take the agenda forward together.

Protection of Jobs and Businesses

Mike Wood Excerpts

Wednesday 9th September 2020 Commons Chamber

[Mike Wood (Dudley South) (Con)]

The breadth and scale of the support package put in place by the Government is genuinely unprecedented, whether in times of war, disease or global recession. In Dudley South, nearly 12,000 of my constituents have been supported through the job retention scheme, and 2,500 more have been supported through the self-employment income support scheme. Without such measures, thousands more of my constituents and millions of workers around the country would have lost their jobs. Whereas the last Labour Government chose to bail out the bankers, this Government have decided that the real priority is to back working people around the country, and that is something of which I am extremely proud.

We now need people back at work and the economy growing so that those jobs can be genuinely protected and sustainable in the medium and long term. It is not just a matter of sandwich shops and coffee bars losing out when large numbers of workers are away from the office and the factory for so long. We live and work in an interconnected economy where all parts of it rely on other sectors. One of the main factors limiting order books for manufacturers and other businesses in my constituency is the fact that so much of the economy is performing below normal capacity, and that impacts on supply chains. The longer that many jobs are furloughed, the less likely those jobs are to be there and to be sustainable whenever the furlough scheme ends, and that is why it is not appropriate to have an indefinite extension of the scheme.

[Jamie Stone]

The hon. Member is very courteous to give way. I too pay tribute to the furlough scheme, which has been very helpful to businesses in my constituency. I am the chair of the Excluded UK all-party parliamentary group. Other Members have made this point already, but does he agree that the APPG would not have happened had it not been for support from the Government Benches? It would be helpful if we could have a meeting with Ministers from the Treasury to discuss constructively how we might be able to help the people who have been missed out.

[Mike Wood]

I obviously will not answer on behalf of Ministers as to their availability for meetings, but for those who fell outside these extensive schemes, I think they more than anybody need the economy to be moving back towards a state approaching normality, because that is where their sustainable income comes from. The quicker we can do that, the better it is for them.

While it would not be appropriate to have an indefinite extension of the furlough scheme—I do not think furlough is even a medium-term solution—there are some parts of the economy where there are particular needs for support. The measures announced earlier this afternoon by my right hon. Friend the Chief Secretary to the Treasury for businesses that are told to shut and for individuals who are made to self-isolate are extremely welcome. I do hope that Ministers will look at what measures other than furlough might be appropriate for those businesses when legislative requirements mean that they cannot operate or cannot operate economically —we have heard about theatres and live events—or where ongoing regulations mean that demand has simply being taken away. For some parts of the tourism and travel sector, for example, quarantine measures mean that their customer base is not there at all. Businesses across the economy would not have survived the last six months without the innovative support that has been put in place by the Chancellor. I thoroughly welcome that, but now we need to build the economy for a sustainable future.

Stamp Duty Land Tax (Temporary Relief) Bill

Mike Wood Excerpts

2nd reading & 2nd reading: House of Commons
Monday 13th July 2020 Commons Chamber

[Dan Carden]

Of course this is about priorities for Government spending. Time and again, we have called on the Government to put forward a credible plan to build the homes that our country needs. We are also concerned about which parts of the country this Bill will benefit the most. The Institute for Fiscal Studies has said that first-time buyers might be made worse off by the changes.

As the stamp duty threshold for first-time buyers is already set higher—at £300,000—raising the threshold to £500,000 is worth comparatively less for first-time buyers outside London. In fact, it is possible that the Chancellor is removing one of the few advantages that first-time buyers have. Will the Minister comment on the IFS analysis and tell us: will first-time buyers benefit at all?

[Mike Wood (Dudley South) (Con)]

Does the hon. Gentleman not recognise that, in order for housing supply to be available to first-time buyers, existing homeowners need to be able to move house to move up the housing chain? By supporting them to do so through these measures, it makes it easier for first-time buyers to get their first home.

[Dan Carden]

I heard someone say, “We need to build more houses” and that is absolutely correct. But of course, we support anything that stimulates the housing market and jobs in the supply chain thereafter.

Eight hundred thousand fewer people under the age of 45 own their own home today. This Government have been in power since 2010. Home ownership is at its lowest level in a generation. The Prime Minister has repeatedly pledged to “level up” the country. But the benefits of this cut will be concentrated in London and the south-east.

Estate agent Savills identified the local authorities that will see the biggest fall in tax receipts as a result of the change. Wandsworth, Bromley and Wiltshire will see falls of £40 million, £35 million and £29 million respectively. Rightmove estimates that the average saving in the north-east will be just £646, compared with £15,000 in London. Once again, the Government seem to be prioritising the needs of London and the south-east over those of the rest of the country.

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[Tim Farron (Westmorland and Lonsdale) (LD)]

It is an honour to follow the hon. Member for Redcar (Jacob Young), who made some interesting points about this move. Although, as Members from all parts of the House have said, there are other things we could do with the money—there is an opportunity cost to spending it—there is no doubt that it will make a difference to the economy. The buying and selling of properties has a knock-on effect and creates a multiplier, and that will create some movement. It is worth saying that that does not mean it is the best use that could possibly be made of this money, but given that the Chancellor and the Prime Minister have discovered a veritable rainforest of money trees, this may be a good use for a few of them.

For the good that the measure will do—it is important to concede that—what it will not do is to rise to the challenge of the United Kingdom’s general lack of affordable housing. It has been going on for some time, and this represents a failure to grasp the nettle. I am sure Members will know that Crisis and the National Housing Federation have together come up with a conservative estimate that the UK needs 145,000 new affordable homes per year, 90,000 of which need to be social rented. Shelter takes the view—I think it is nearer to the money—that the number is closer to 300,000. Either way, we need a minimum of 90,000 additional social rented homes a year. The Government will deliver 3,500 this year, but there are just over 3,000 on the social housing waiting list in my constituency alone. That is the scale of the problem, and this measure does not help—it does not hinder, but it does not help.

[Mike Wood]

Does the hon. Gentleman recognise that what probably will help is the £12 billion affordable housing programme announced in the Budget only four months ago?

[Tim Farron]

Potentially—although, to go on a little diversion, we cannot build houses of any kind whatsoever without a workforce. One thing that I wish the Government would take seriously, in looking at their supply chain and the means of reaching their targets, is that we are something like 40% below the workforce required to construct even the Government’s existing programme of development. By the way, the Immigration and Social Security Co-ordination (EU Withdrawal) Bill, which we debated the other week, will take that down by another 9%. The Government can announce whatever big numbers they like, but they cannot press-release their way out of a recession; they have to plan their way out of it. There is a lack of long-term or even medium-term planning, but it is better to spend that money than not, and I concede that it will do more good than the proposal that we are debating.

I represent a constituency where we have, bluntly, London house prices without London incomes. The average household income is about £25,000 a year, and the average house price across the constituency is about a quarter of a million. In the Lake district and the dales, which make up more than half the land mass of my constituency, we are looking at an average property price of more like £400,000. Put bluntly, the average person in my constituency is stuffed when it comes to buying a home, and this measure will not help. We lose one in three of our young people, never to return, for this very reason. Long-lasting, real action is required as well as something like this, which I am sure will give a short-term and necessary boost to economic activity.

I agree with the Town and Country Planning Association and the Nationwide Foundation that we need to redefine what affordability is. We talk about affordability as a percentage of market rent when actually we should be talking about affordability in terms of how it relates to people’s incomes, obviously, because that is what makes something affordable or otherwise. This and previous Governments have used “affordable housing” as a term that is utterly meaningless to the majority of people who are supposedly in the market. Let us take this opportunity to do something radical.

I also agree with the Town and Country Planning Association, and with Shelter, when they say that one of the most useful things that we could do—and since we are in this mood for swift and radical legislation that will make a difference, let us grab the moment—is to reform the Land Compensation Act 1961, which currently fixes the hope value of land at a level based on what would be the most lucrative value of that land rather than pegging it at the actual value of the land. That inflates land prices, inflates house prices, and stagnates the market. If we wanted to reduce the cost of land, reduce the cost of housing and therefore make it more affordable, make sure that every home is zero-carbon, which the Government should also be doing at this time, and make it more likely that land will come forward to be built on in the first place, that is the one thing we would do: it is close to being a silver bullet. In this time of swift legislation and passing whole Bills in a matter of hours, that is what we should use one of these slots for. Radical change is important, and we in this House have the opportunity—and, I think, the mood—to do it.

We should also be reforming viability assessments and preventing developers from changing the goalposts after they have been given planning permission. I want to see developers forced to deliver not just zero-carbon homes but homes that are genuinely affordable, and not then going over the field, digging up a few rocks, and saying, “Oh, I’m sorry, I can’t afford to do the affordables anymore.” This is an opportunity for the Government to make sure that any new building that takes place, and such as I trust will take place, will deliver homes that people can actually afford.

As has already been said by my hon. Friend the Member for Richmond Park (Sarah Olney), who made a really good and important contribution, this move will not help any of the people facing financial ruin, such as the one in four in my constituency who work for themselves, many of whom are directors of small limited companies, newly employed people or new starters. They are the entrepreneurs we need to rely on to build back for our country and to build our economy, and they have been excluded. As she said, we had the launch of the all-party group last week with 200 Members there, many of them Conservatives. My message to friends and colleagues on the Conservative Benches is: this is your moment to put your money where your mouth is and to stand up for those 3 million excluded people in this country, and to say that the Chancellor must back them, because they are not in a position to consider whether they are going to move house; they are in a position of wondering whether they can afford to feed their kids. This is the time when the Chancellor must act.

Just as distressing for us in south Lakeland is the bonus that is being given to people who own second homes. I want to be very clear here: I am not talking about holiday lets, which are crucial to the tourism economy in the lakes and the dales and elsewhere, bringing in visitors who spend their money locally. Holiday lets are part of a tourism economy that is worth £3 billion a year and more, and employs 60,000 people in Cumbria—our single biggest employer—so it is vital that we support that industry. I am talking about homes owned by people as a second property that they visit maybe a few times a year—and good luck to them. I want those people to feel welcome: this is not a personal slight on them. But as somebody who lives among these communities, I cannot deny the evidence of my eyes, which is that excessive second home ownership kills communities. When 50% of the homes in Coniston are not lived in all year round, of course that is one of the reasons why the schools in that community do not have the numbers they would otherwise, of course it is a reason why bus services shut, and of course it is a reason why shops, post offices and others struggle. That is why this boon and bonus to second home owners is an insult to people in the lakes and the dales—the local people struggling to get by there—and why this should be an opportunity not to give these people an additional incentive to take homes out of the local market, but to tackle the incentives that currently exist.

Some 18 months ago, the Government concluded a consultation on whether they should close the loophole that allows second home owners effectively to pretend that the home is a business and therefore avoid paying any tax whatsoever. In the 18 months since—I accept that it has been a busy 18 months—naff all has happened. The Welsh Assembly Government closed that loophole and did so effectively. Why will the Government not take the opportunity to do that and help constituencies like mine? That loophole needs to be closed.

In summary, I am deeply concerned about this proposal. It will do some good and I can see the economic arguments for it, so we will not formally oppose it when it comes to any Division, but we must understand what it is and what it is not. It will increase demand, but among those it will help are those lucky enough to have multiple homes. It does not help those who are desperate to put food on the table and pay the rent. The Government are not helping the excluded and this was the chance to do that. The proposal has some economic value. It will help to kick-start the economy in the short term and that is welcome insofar as it goes, but it is a scattergun attempt to build back quicker, not build back better. If we do not build anything new either, it is simply a case of “buy, buy, buy”, not “build, build, build.”

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[Mike Wood (Dudley South) (Con)]

We have faced a huge human health crisis, and we are now working to prevent that horrific health crisis being accompanied by a similar economic crisis. The Government have delivered an extensive package of support measures for workers and for companies through the coronavirus job retention scheme. They have delivered support for the self-employed through grants, loans and a wide range of measures to help protect jobs and ensure that despite the enormous impact of this outbreak, businesses are able to see a way through it and are able to continue to employ people, and the self-employed or those in small businesses can see a way to get through the outbreak to rebuild in the better times ahead.

Sadly, of course, many people have already lost their jobs and, even more sadly, many more are likely to lose their jobs over the coming months, as businesses take time to adjust—to adapt their businesses to order books which, in many cases, are unlikely to return to pre-crisis levels for some time. We need to do what we can to minimise those job losses and to help as many people as possible to return to work and to stay in work, because we know, as we have seen from previous recessions, that jobs can be lost very quickly during economic downturns. It can take many, many more years to replace those jobs and to bring people back into work. With a shock as sharp and as deep as the one that we have seen over the past few months from this pandemic, measures such as this and the many others that the Chancellor has announced over the past four months are not only appropriate, but unprecedented and certainly necessary.

If we are to prevent enormous numbers of people from losing their jobs, enormous numbers of businesses from closing for good, and enormous numbers of families from being deprived of the security and prosperity of paid employment, we need the economy to recover, which means that we need consumers to start spending. We need consumers to have the confidence to return to something approaching economic normality. If people do not have confidence in the economy, they do not part with their cash. When that happens, there is a risk of a vicious circle of economic decline, with inevitable large job losses as a consequence. It is crucial that we break that cycle and promote spending, which is why I support this legislation today.

This measure is designed to bring forward spending. Certainly, the largest piece of spending that almost anybody makes is investment in a home. We need to make sure that consumers have the confidence to make those decisions over the next few months as we rebuild our economy rather than put them off for a year or more, because, naturally, caution, for many of the reasons that the hon. Member for Richmond Park (Sarah Olney) mentioned, may make people concerned about such large spending as we come out of this health crisis. Our economy needs this economic activity to recover. It needs people to be spending. It needs a successful and vibrant housing market, because, as many hon. Members have said, the housing market is not purely about those businesses and those industries that are directly associated with it—the estate agents and the removal firms—but something that goes far beyond that. It goes through construction, to the decorators, the small businesses, the self-employed carpet fitters and the gardeners. In many cases, much of their work centres around people who are moving into new homes and wanting to make them to their taste.

As chair of the all-party group for furniture and furnishings I know how much of furniture manufacturing and retail in this country depends on a successful and thriving housing market. By stimulating that market—by bringing forward to the next six or nine months the decision to buy a house that could be put off for a year or more—we are protecting those jobs by giving confidence to those companies, to those employers, and to those small businesses that there will be a housing market and that there will be people wanting to redecorate, to refit their bathrooms, to redo the garden and to buy new furniture. This measure will give them the confidence to invest in their staff and to keep their workforce as close to normal levels as much as possible. That seems to me to be a good investment. When the question is asked as to whether this is the right way for the Chancellor to spend resources, I invite right hon. and hon. Members to consider what the alternative is. I do not see the evidence locally that the housing market is instantly bouncing back without further intervention and support. I am not seeing a huge amount of confidence; quite the reverse. As the hon. Member for Richmond Park said, people are nervous about the plans that they had put in place either to buy their first home or to move up the housing ladder. In many cases they are saying, “Perhaps now is not the right time.” If the measures in the Bill can help to bring forward those decisions and to make sure that that spending happens as soon as possible, that will protect the jobs and the prosperity that our constituents rely on. That is why I will support the Bill this evening.

Covid-19: Economic Package

Mike Wood Excerpts

Tuesday 12th May 2020 Commons Chamber

[Rishi Sunak]

Those who were in seasonal work can use an average of their earnings over a period for furlough payments, or indeed the same month on a year-over-year basis if that is a more generous way to calculate their eligibility. That is the most generous way to treat those in seasonal employment under the scheme and ensure that we reflect their earnings appropriately.

[Mike Wood (Dudley South) (Con) [V]]

These measures are exactly what manufacturing firms in Dudley South have called for as they start to reopen. Will the Chancellor undertake to work with our excellent Mayor, Andy Street, to ensure that the needs of west midlands manufacturing and its employees are fully considered as they start the task of rebuilding our economy?

[Rishi Sunak]

I can give my hon. Friend that reassurance. I look forward to speaking further to him and the excellent Mayor, Andy Street, as we all work together to drive the west midlands economy as part of the economic recovery plan. He, the Mayor and his businesses can play a leading role in that.

Economic Update

Mike Wood Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

If the hon. Lady will forgive me, I do not have a precise answer for her at this moment, but I will look into the matter as soon as I am done and write to her.

[Mike Wood (Dudley South) (Con)]

A firm in the hospitality sector has written to me to say that tomorrow it must lay off 200 workers and halve the pay of 100 more, because bookings are close to zero and it cannot cover the wage bill. How much longer should it hold off?

[Rishi Sunak]

Hopefully it will benefit today from the significant measures that have been put in place to provide forward business rate relief and immediate cash support through grants. That should provide the business with some reassurance that help is on its way to enable it to protect jobs, with more to come.

Oral Answers to Questions

Mike Wood Excerpts

Tuesday 11th February 2020 Commons Chamber

[Mr Speaker]

I call Mike Wood.

[Mike Wood (Dudley South) (Con)]

Thank you, Mr Deputy Speaker—[Interruption.] I am sorry, Mr Speaker—it has been so long!

Perhaps I should declare an interest as a member of the Midcounties co-operative. Will my hon. Friend consider broadening the eligibility for social investment tax relief so that more mutuals and social enterprises can deliver excellent services and outstanding social value?

[John Glen]

I always listen very carefully to what my hon. Friend says. I think the best way forward would be for me to meet him to discuss his specific proposals and see what can be done.

Beer and Pub Taxation

Mike Wood Excerpts

Wednesday 5th February 2020 Westminster Hall

[Mike Wood (Dudley South) (Con)]

I beg to move,

That this House has considered taxation on beer and pubs.

I am delighted to have secured another important debate covering the brewing and pubs sector in the UK. This one is particularly timely because the all-party parliamentary beer group will hold its event celebrating the beers of the UK in Parliament this evening, to which, of course, all Members are very welcome.

Beer and pubs in the UK are a home-grown manufacturing success story. They are represented in every part of our United Kingdom and in every one of our constituencies. Some 80% of the beer brewed by this country’s fantastic brewers is consumed in this country. The industry supports almost 900,000 jobs in all corners of the country, including more than 1,000 in my constituency.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I congratulate the hon. Gentleman on securing this debate, and he is absolutely right about the success story of our pubs and brewing industry. However, does he agree that we have seen far too many pubs close in recent years and that we really need to value them as community hubs?

[Mike Wood]

The hon. Gentleman could not have read my mind more thoroughly if he had had a copy of my speech.

[Sir Greg Knight (East Yorkshire) (Con)]

Will my hon. Friend give way?

[Mike Wood]

I had almost answered the previous intervention, so I will of course give way.

[Sir Greg Knight]

I am most obliged to my hon. Friend for giving way, and I congratulate him on securing the debate. May I amplify the point that was just made and ask whether he agrees that the public house is the heart and soul of the local village in many rural areas?

[Mike Wood]

I would go further than that: in many areas, and not only rural areas, the pub is the last service, and often the last facility, in the town or village. Often, it is not just a place to drink, but also the place with the shop or where people get their hair cut. There might also be a jobs club or any number of other services there.

[Lilian Greenwood (Nottingham South) (Lab)]

The Plough Inn in Radford, which is in the inner city of Nottingham and which is also the brewery tap for Nottingham Brewery, is precisely the sort of nucleus of the local community that he has described and the landlady, Mel, is a legend. Does he agree with the managing director of Nottingham Brewery, Phil Darby, who says he is worried that if action is not taken on beer duty and small brewers relief, the price of a couple of pints in a pub will simply not be able to compete with the price in supermarkets for much longer?

--- Later in debate ---

[Mike Wood]

The hon. Lady is absolutely right. As has been made clear, pubs are much more than just a place to drink.

[Bill Esterson (Sefton Central) (Lab)]

The debate is about taxation of pubs and breweries. I received an email from one of the three excellent small breweries in my constituency—it was from Les O’Grady, who runs Neptune Brewery, as well as a taproom there. He employs three people, and he makes the point that his challenge is the current relief—the taper—and the fact that it is difficult for him to overcome that barrier in growing his business. That is a challenge faced by all small breweries. Does the hon. Gentleman agree that there is a strong case for pressure to be put on the Treasury to change those rules, to enable these brilliant manufacturers and employers to grow as they wish to?

[Mike Wood]

The small and microbrewers of this country have been one of the great success stories of the past 20 years in brewing. They have transformed brewing and beer across the country—both the diversity and the quality. The small brewers relief scheme that was introduced under the previous Labour Government has done a fantastic job in increasing the number of small brewers. However, we now need to look at the disincentives the existing thresholds create in terms of growth, expansion and employing more people. For example, Black Country Ales, which is based in my constituency, faces exactly the issues to which the hon. Gentleman referred.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I congratulate my hon. Friend on securing this important debate. The hon. Member for Sefton Central (Bill Esterson) and my hon. Friend are exactly right about the importance of the small brewers tax relief. Does my hon. Friend agree that this issue is about not only changing the shape of the relief curve, to remove that barrier to growth for the really successful craft brewers, but maintaining the 50% reduction in duty for the very small craft brewers so that they can get a foothold in the marketplace?

[Mike Wood]

My right hon. Friend makes an important point. I have a feeling the Minister might just touch on small brewers relief in his response to the debate, because the Treasury has of course conducted a review into it, and we are all looking forward to seeing some of the results of that review—hopefully, we will see them before too long.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

Will the hon. Gentleman give way?

[John Howell (Henley) (Con)]

Will my hon. Friend give way?

[Mike Wood]

If I may, I will give way to the hon. Lady first, and then I will come back to my hon. Friend.

[Dr Cameron]

I thank the hon. Gentleman for giving way and for bringing this extremely important debate to the House today. Does he agree that we also need common-sense rateable values? The Glassford Inn in our community is under threat of closure due to the ridiculous rateable value that has been placed on it, meaning that it would actually have to sell a drink to every single person in the village every single night of the week just to meet the rates, never mind make any profit and pay the staff. Does the hon. Gentleman agree that common sense is needed in this agenda and that we must support our rural pubs so that they can continue?

[Mike Wood]

The system of non-domestic rates—business rates—is fundamentally a system of local taxation that was designed in the 19th century, building on the previous poor law. It really does not suit the needs and features of a 21st-century economy, particularly one where so much retail is increasingly moving out of town or on to the internet—as yet, nobody has designed an effective virtual pub that can serve a virtual beer that is quite a satisfying as the real thing. We are in a position where our community pubs are at an unfair disadvantage, as the hon. Lady says, compared with businesses that can reduce their liabilities.

[Mr Steve Baker (Wycombe) (Con)]

Will my hon. Friend allow me to intervene before he moves on?

[Mike Wood]

I promised my hon. Friend the Member for Henley (John Howell) that I would give way to him.

[John Howell]

I thank my hon. Friend for giving way. One of the things I have been most proud about over the last 12 years is that, at the beginning of that period, we introduced assets of community value. If that system is operated properly, as it has been in my constituency, it allows a huge number of pubs to become self-owned by their communities so that they can continue to prosper. Does he see that system as a good way forward?

[Mike Wood]

We have some exceptionally good community-run pubs up and down the country; I visited one in Stafford a couple of years ago. It was on the point of closing down and could easily have become derelict. However, because of the assets of community value system, it was possible for the local community to take it on and see it succeed. We are also seeing such pubs in Twickenham, and I have a feeling that the hon. Member for St Albans (Daisy Cooper) may refer to similar schemes in her own constituency later in the debate.

As well creating and supporting jobs, the beer and pub sector is a massive contributor to the economy more widely and, of course, to the Exchequer, as the Minister will know. The sector’s total value to the economy is almost £23 billion; in my constituency, our breweries and pubs contribute £30 million to our local economy. Nationally, the sector pays almost £13 billion into Treasury coffers, which I am sure the Minister is grateful for ahead of the Budget.

[Giles Watling (Clacton) (Con)]

Does my hon. Friend agree that the pub is not only, as he described, a great financial asset to the UK, but a unique selling point for it? People come from all over the world to visit our pubs, including our rural pubs, right across the country. That is why we must support them by having differential rates.

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[Mike Wood]

Again, my hon. Friend pre-empts a later part of my speech. In terms of attracting tourists and investment into the United Kingdom, beer and pubs are one of the top three things tourists say they want to do while they are visiting. Of course they want to have fish and chips. Normally, they also want to visit some of the heritage, whether it is Buckingham Palace or Stratford-upon-Avon. The third thing that always comes up is that they want a pint of proper British beer in a proper British pub.

[Mr Steve Baker]

My hon. Friend is being incredibly generous in giving way, and I know he wants to make progress, but will he help me put on record the sheer scale of the attendance at this debate? Clearly the Minister would be incredibly popular if only he cut tax on beer and pubs. With that, I will let my hon. Friend resume his magnificent speech.

[James Gray (in the Chair)]

Order. The hon. Gentleman prompts me to comment that this debate is hugely popular. A lot of Members would like to speak—I have some 17 on my list. It is of course up to the hon. Member for Dudley South (Mike Wood) whether he takes interventions, but constant interventions will mean that his speech is very long and that there may be time for only five to 10 speeches from Back Benchers. If we keep interventions a little bit under control, we can get more speakers in later on.

[Mike Wood]

I will endeavour to follow your guidance, Mr Gray. My hon. Friend the Member for Wycombe (Mr Baker) makes the point extremely succinctly. I would like to pretend that I was the big attraction in this debate, which has brought so many Members from all parts of the House to this Chamber, but it probably has a little more to do with the quarter of a million people who have signed the Long Live the Local petitions. That has resulted in nearly 130,000 emails being sent from constituents to Members of Parliament, encouraging them to support our beer and pubs and to press for the kind of support that my hon. Friend was calling for the Minister to announce. I know the Minister will not feel too confined to his briefing and his mandate; I am sure he can go a little off-piste later.

It is not an exaggeration to call the pub an essential part of British life, but the link between beer and pubs is completely inextricable. Seven in 10 of the alcoholic drinks sold in pubs are beer, and beer accounts for more than half of a pub’s turnover. A thriving brewing sector is intimately entwined with successful local pubs. The statistics, the employment and the economic contribution are extremely impressive—including the £100 million raised for charity every year by pubs up and down the country—but there is so much more to beer and pubs than figures alone.

The great British pub is one of our most loved national institutions and is the heart of so many of our communities. We only have to think of the times we have stopped for directions in our constituencies. Those directions are more likely to be, “Turn left at the Old Cat and then go straight on at the Red Lion”, than to refer to street names. Pubs also make a huge difference on social issues. Loneliness and isolation are among the top social issues facing our society, and pubs do so much to help.

We have already talked about the many services that pubs offer. When the pub is the last service or facility in the town and it closes, it is not only a place to drink that goes, but all the services. Visiting Cornwall with the wonderful Pub is the Hub charity in 2018, I saw pubs that were home to convenience stores, hairdressers and jobs clubs. Last year, the all-party parliamentary beer group conducted an inquiry into unlocking pubs’ potential, which we should be publishing in the next few weeks. We heard evidence of the social contribution made by pubs in rural and urban areas alike, whether that was pubs providing meals for people with dementia and their partners, Christmas meals for the isolated and lonely, free meals for older people, yoga classes, literacy groups, or parent and toddler groups. Pubs are the original social network, bringing people and communities together. Unlike some more modern social networks, Facebook pays just over 1.5% of its UK turnover in tax; pubs typically pay about a third. That averages to some £142,000 a year a pub to the Exchequer.

A large part of that money is in the form of business rates. The recently announced extension of the pub-specific relief, which knocks £1,000 off the bills of pubs with rateable values of less than £100,000, will help a huge number of pubs—in particular, smaller ones—as will the 50% reduction in business rates bills for certain businesses. For pubs, the burden of business rates remains particularly acute because of the way pub valuations work. Pubs account for 2.8% of all business rates revenues, despite accounting for only 0.5% of rate-paying business turnover. That amounts to an overpayment of £500 million every single year. Pubs pay more in business rates compared with turnover than any other sector. That is a basic fairness issue.

Every extra pound on the business rates bill makes it harder for a pub to survive, while some sectors of the economy simply do not seem to be paying their fair share. We need the fundamental review of business rates that the Government promised in our election manifesto and a new system that reflects the realities of the 21st-century economy.

The other main tax burden on our beer and pubs is duty, and beer duty remains much too high. It is much higher than in any other major beer-producing country in Europe. In fact, someone who bought a pint in each of the five other major beer-producing countries—Germany, the Netherlands, Spain, Belgium and Poland—would still have paid less duty on those five pints than they would on a single pint in Britain.

Successive coalition and Conservative Governments have taken action to limit the impact of beer duty on pubs since abolishing—I have to call it this—the hated beer duty escalator in 2013. That has saved pubs and pubgoers millions of pounds, which can be seen in the change in the fortunes of many of our brewers and pubs. I hope the Treasury will go even further by offering support for British beer and pubs in next month’s Budget, because keeping a lid on beer prices helps to keep pubs viable. What is more, taking action to limit beer duty increases sends a positive signal to the quarter of a million supporters of the Long Live the Local petition, not to mention the 25,000 individual pubs backing the campaign. A cut or freeze in beer duty will appear on the Treasury’s books as a cost, but evidence suggests that keeping costs down for brewers and consumers leads to increased revenue.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The hon. Gentleman may wish to remind his colleagues in the Treasury of a helpful precedent that they may wish to follow. The coalition Government cut the duty rate on spirits by 2p. At the time, that was expected to reduce revenue; in fact, revenue increased fairly significantly as a result.

[Mike Wood]

I agree with the right hon. Gentleman. Indeed, there is an even more recent example. The excise revenue from beer is up £250 million compared with Treasury forecasts since 2017-18. That appears largely to be down to boosts to beer and pubs following freezes in duty in the 2017 and 2018 Budgets. Further action on beer duty in the Budget would clearly boost jobs and investment in beer and pubs. It would also likely lead to additional custom, which generates extra revenue.

Beer duty needs to be lower overall. Within that, we need to look at how that beer duty is levied. We need a wider review, first to look at the operation of small breweries relief and whether it acts as a disincentive to growth and expansion, and secondly to look at how beer duty can better support our community pubs, rather than the “stack ’em high, sell ’em cheap” produce in some off-licences and supermarkets.

Now that we have left the European Union, with the implementation period ending at the end of the year, there is an opportunity for a fundamental review of how duties are structured. I urge the Treasury to look at how beer duty could be levied at a lower rate for beer that is likely to be sold in pubs, and particularly when it is levied on draught beer, kegs and casks rather than small-pack cans and bottles. Supporting our community pubs in that way, without giving the dead cost of duty cuts to supermarkets, would make a big difference to many of those pubs.

Members on both sides of the House will not need persuading of the intrinsic value of pubs to not just the economy but society as a whole. As ever, it bears repeating that the pub is in many ways synonymous with the UK.

[Mr Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Member on securing this incredibly important debate. Alongside what he said about the economic and social value of pubs, does he agree that the pub is also the safest place for drinking to take place, particularly for problem drinkers? Supporting our pubs has a huge benefit in terms of health expenditure too.

[Mike Wood]

Further to that, research from Professor Dunbar of the University of Oxford suggests not only that it is safer to drink in moderation in a well-run pub, but that people who drink regularly and in moderation in a local pub are more likely to be happier and healthier—both their physical and mental health is likely to be better. Although the immediate appeal of the modern temperance movement, calling for large increases in duty to try to reduce consumption, is understandable, high levels of duty tend to move consumption away from well-regulated and licensed premises to people buying cheap alcohol to consume at home, or in public, without the protections that licensed premises provide. The issue is therefore one of safety, health and public health.

I am delighted to see so many Members present to support Great British brewing and the pub industry. I hope the Minister will hear the messages of gratitude for the action that has already been taken, as well as the messages of hope and desire for—and even expectation of—continued support, which is needed to ensure that brewing in pubs remains viable for many years.

[Several hon. Members rose—]

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[Mike Wood]

I thank all hon. Members who have contributed to the debate. We have had many contributions from six different political parties representing all four nations of the United Kingdom. They have displayed a rather rare unity of opinion, purpose and passion: beer and pubs are a force for good, and they should be supported through our taxation system.

I thank CAMRA, the Society of Independent Brewers, the British Beer and Pub Association, Long Live the Local and the quarter of a million people who have signed up to the Long Live the Local campaign for highlighting the importance of this issue. We have the opportunity of two Budgets this year, and I hope we will have support on beer duty in March. At the end of the year, we can have the announcements on a new system of beer duty for a post-Brexit Britain.

Question put and agreed to.

Resolved,

That this House has considered taxation on beer and pubs.