Beer Duty Escalator

Pauline Latham Excerpts

Thursday 1st November 2012 Commons Chamber

[Pauline Latham (Mid Derbyshire) (Con)]

I congratulate my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland). I know that my hon. Friend the Member for Burton has a large brewery in his constituency, but I want to speak up for micro-breweries. My understanding is that there are more micro-breweries and members of CAMRA in Derbyshire than anywhere else. In Derby we also have a beer king, whose ceremonial role includes opening the annual beer festivals in Derby and representing Derby when the city mayor and others go to our twin city of Osnabrück in Germany.

In my constituency of Mid Derbyshire, the brewing and pub sector is a vital and dynamic part of the local economy. It creates jobs, adds to the local economy and is at the centre of the hospitality industry, our cultural heritage and the social life of every community. A world heritage site runs through my constituency.

The beer and pubs industry is a vital part of the local economy in Mid Derbyshire. There are 75 pubs and three micro-breweries, which generate 1,076 jobs—some 307 of those are filled by young people between the ages of 16 and 24. The point about the employment of young people is important, because in spite of recent good news on the employment front, people in that age group continue to find employment very hard to come by.

Some 65% of staff at the Derby Brewing Company are under 25; the company also operates entry-level management schemes that have promoted many promising young people from bar-staff to senior-manager level, none more so than at my local, The Queen’s Head in Little Eaton, which has recently reopened. The brewery is working towards brewing real ales with a much lower alcohol content; it is working down towards a 4% beer.

This debate is critical to business in Derbyshire. Representatives of the Derby Brewing Company, which owns three pubs, have told me that since the introduction of the beer duty escalator, excise duty has increased by 42%—almost 20p per pint.

My husband and I are supporters of the Campaign for Real Ale because we believe that going to the pub, particularly the local, is a core British tradition and so is enjoying great beer, although personally I am not a beer drinker. Unfortunately, however, beer sales in pubs and clubs have fallen by 23% and more than 6,000 pubs have closed. I believe one of the main reasons for that is that beer taxation now costs the average pub around £66,000 per year. I strongly believe that those unintended consequences go completely against the Government’s strategy for economic growth. The Treasury forecasts a small increase in duty revenues from the policy—so small that no additional revenue is predicted in the Budget document.

I recognise that we have alcohol-related problems in our society that we need to tackle, as they cost the NHS billions of pounds every year. There is also the crime and disorder associated with alcohol and the fact that alcohol is the second biggest risk factor for cancer after smoking. But trying to tackle those problems with increased tax at this time is not the right way forward. The issue is having a profound effect in Derbyshire; pubs continue to close across the county. Brewing and pubs are fundamental to British industry, generating a huge amount locally and nationally to GDP. In these troubled times, local pub owners are urging me, as their MP, to ask for their industry to receive some relief from the excessive duty increases. In Derbyshire, a change to the policy could make a big difference and safeguard jobs.