Finance (No. 2) Bill

Debate between Mike Wood and Jacob Collier

Committee of the whole House
Tuesday 13th January 2026 Commons Chamber

[Jacob Collier (Burton and Uttoxeter) (Lab)]

As the MP representing the home of British brewing, Burton-upon-Trent, it will come as no surprise that I will speak to clause 86, and focus my contribution on pubs and hospitality. For me, this not just political; it is personal. As a Burtonian, I grew up with the smell of hops permeating the air and Burton’s famous water flowing from the taps. My very first job was in a pub. This industry is who we are.

Pubs are woven into the very fabric of our country. They are the heart of our high streets and villages, and are among our last shared spaces. When we talk about growth, and supporting wellbeing and employment, pubs and hospitality sit at the heart of that conversation. Yet this is an industry that has faced years of challenge. Navigating the pandemic, absorbing high energy costs and managing rising prices have left many venues operating on very low margins, if any at all.

That is why the decisions we make in this clause matter so much. We must look carefully at the overall effect of alcohol duty and how it interacts with consumer behaviour. There is a case for strengthening differential rates of duty between supermarkets and pubs, known as draught relief. Drinking in a pub is not the same as drinking at home. Pubs are supervised, regulated spaces. Landlords ensure responsible drinking, with pubs providing social connection and supporting mental health in our communities. Pubs give character to our high streets and town centres, yet the tax system makes it cheaper to buy alcohol in bulk from a supermarket than to go down the local pub. If we are serious about encouraging people back into our town centres, into these shared protected spaces, alcohol duty must work in favour of pubs.

I encourage Treasury Front Benchers to read the letter from those of us on the all-party parliamentary beer group, which calls for the multiplier to be increased from around 13% to 20%. Our proposal is supported by the Campaign for Real Ale, the Society of Independent Brewers and Associates and the British Institute of Innkeeping. This is not about encouraging more drinking; it is about encouraging better drinking in places that strengthen our local communities and our local economies.

I recognise that the Government have put in place the permanently lower multiplier on business rates for retail, hospitality and leisure businesses, but any wins in this space have been wiped out in many cases by the new rateable values published by the VOA. In my constituency, the rateable value of the Devonshire Arms—the Devvie, my favourite pub—is set to increase by over 60%. Down the road at the Roebuck, the rise is more than 70%. At this rate, I am not going to have much of a pub crawl.

We must stay true to the manifesto commitment we made to level the playing field between online retailers and the high street. An average 76% increase for pubs compared with just 14% for online retailers means that we must think again on this policy. It is no good having transitional relief in place when the bill at the end of the three years is simply unaffordable.

Industry voices are clear that further support is needed in the short term while longer-term changes and reforms are worked through. Operators such as Punch Pubs, which is headquartered in my constituency, have called for a higher business rates discount—up to the maximum permitted—to help offset the valuations and the cumulative tax burden that pubs face. UKHospitality has similarly warned that even after reduced multipliers and the transitional relief that the Government have put in place, the average pub faces a significant increase to its business rates bill, alongside other cumulative impacts that hon. Members talked about earlier.

The Government are right to listen to Labour Members who have been raising the voices of pubs, brewers, restaurants and small business owners. I want to thank those publicans, business owners and representative bodies that have engaged positively with me; it is only through working together constructively that we can bring about change.

Businesses that I speak to want to invest and grow, but they need the space and certainty to do so. I really welcome the recent hospitality investment that my constituency has seen—from Lowe’s on Carter Street to Nathan Dawe’s expansion of Isabel’s and Bespoke Inns’ redevelopment of the Hart and taking on of Tutbury Castle. Such businesses need to be supported by Government so that we can meet their ambitions. We must create more well-paid jobs and revive our high streets and town centres.

That means a fair approach to alcohol duty under clause 86, a recognition of the difference between pubs and supermarkets, and targeted support on business rates while deeper changes are delivered. If we get this right, the reward is clear: thriving pubs, stronger high streets, more resilient local economies, and communities that are not just better off but happier and more connected. That is why pubs and hospitality must continue to be listened to, supported and championed in this House and by this Labour Government. I shall continue to do that.

[Mike Wood]

It is a genuine pleasure to follow the hon. Member for Burton and Uttoxeter (Jacob Collier), who made some excellent points. Before I begin, I will disclose that although I do not have any relevant interests to the debate in the Register of Members’ Financial Interests, I have received hospitality below the threshold from UKHospitality, the British Beer and Pub Association, CAMRA and the British Institute of Innkeeping; there may be others.

People up and down the country may be justified in asking what the Government have against pubs. Many things are causing so many pubs to struggle and to question whether they can survive beyond the very short term—the enormous increases in business rates, the increases in employer national insurance that particularly hit those who employ part-time workers, and the ever-growing burden of regulation, not least in the Employment Rights Act 2025, that affects many pubs and hospitality venues—but I think that this clause in the Bill really sums it up,

The Government did have a choice. The Chancellor could have built on a success of the previous Conservative Government—in fairness to her, she actually did so last year—by reducing that draught duty rate so that duty on beer and cider sold on draught in pubs was paid at a lower rate, perhaps at the same time as extending the differential with supermarkets and off-sales that might be sold at or below cost price. But she chose not to do that; she chose to increase duty on top of all the extra burdens that are threatening the survival of our community pubs, bars and other hospitality venues. By increasing duty by RPI rather than the lower rate of CPI, the Chancellor is threatening to return us to the bad old days of the previous Labour Government’s hated beer duty escalator, under which the duty rate increased year after year.

I think the hon. Member for Birmingham Northfield (Laurence Turner) suggested that this measure is somehow in keeping with the policy of successive Governments, but nothing could be further from the truth. In just 19 months, the Government will have increased beer duty by more than it went up in the 12 years running up to the last general election. This is a massive increase in duty in a short period. Indeed, the duty paid on a pint in a pub was actually lower in July 2024 than it had been 12 years earlier because of policy decisions made by Conservative chancellors.