Beer Duty

Peter Dowd Excerpts

Tuesday 7th March 2017 Westminster Hall

[Peter Dowd (Bootle) (Lab)]

It is a pleasure, as always, to serve under your stewardship, Sir Roger. I too congratulate the hon. Member for St Austell and Newquay (Steve Double) on bringing this matter to our attention.

Tomorrow’s Budget day is also International Women’s Day, so I thought it would be apt to begin my remarks by quoting the great female poet of the 20th century, Sylvia Plath:

“The beer tastes good to my throat, cold and bitter”.

At the other end of the spectrum, we have Frank Zappa, who said:

“You can’t be a real country unless you have a beer and an airline—it helps if you have some kind of football team, or nuclear weapons, but at the very least you need a beer.”

That probably sums matters up. They are just two of two of the vast number of people who, like us, have enjoyed what is widely believed to be the oldest and most consumed alcoholic beverage in the world.

According to estimates by the British Beer and Pub Association, around 30 million adults visit a pub at least once a month, and beer accounts for around two thirds of alcohol sold in pubs. In economic terms, the pub sector contributes £23.1 billion to the British economy and £12.6 billion in tax to the Exchequer. It also supports nearly 900,000 jobs, 42% of which are for under-25s. Brewing alone employs over 100,000 people, as many Members have referred to today.

Of course, that picture has to be counterbalanced by the health impacts of alcohol, which have already been touched on by Members today. Public Health England estimates that alcohol harm costs about £21 billion a year generally and specifically costs the NHS £3.5 billion. Consequently, when we debate this issue, we really must consider it in that wider context.

Of course, many traditional drinking establishments are now under threat, not least because business rates revaluation is coming into effect, as my hon. Friend the Member for Chesterfield (Toby Perkins) said. In fact, in my constituency we have had to say goodbye to several novel establishments, including the Talbot, the Elm House, the Wyndham Hotel, St George’s Tavern and the Stand Park, some of which I have drunk in myself in the past. We tried to make the Priory a community pub but could not succeed, and the story is the same right across the country. None the less, we still have many great pubs and long may it remain so. In my constituency, in the Crosby area, there is a micro-pub called the Liverpool Pigeon. That has given a really good boost to the sector and to the confidence of the local community, so I say “Well done” to the Liverpool Pigeon.

Pubs are more than just small businesses. As many Members have said today, they are often community hubs. Increasingly, they offer other goods and services, such as food, hot drinks and meeting spaces, and even libraries and postal services in some places. In my constituency—and, I am sure, in many others across the country—we have church parish clubs, including St Benet’s and St Elizabeth’s and even one called the Holy Ghost, which play a similar role to community pubs. The Holy Ghost is not the top of the pile, except perhaps in theological terms. My constituency also has the Royal British Legion and the Royal Naval Association comrades clubs. All those establishments help to support our communities in a whole range of ways.

I think all hon. Members would acknowledge that pubs are an important community asset and that we must do all we can to help them to succeed, not withstanding the health issues. We always need to have those issues in mind, but we should not let them overshadow all other considerations.

As hon. Members have said, it was announced in the 2016 Budget that the duty on beer, spirits and most ciders would be frozen for 2016-17; that freeze followed three consecutive years of duty cuts on a typical pint of beer. On the other hand, duties on all other alcoholic drinks, such as wine at or below 22% alcohol by volume and high-strength sparkling cider, rose in line with the retail price index. Will the Minister say what effect that has had on prices for customers and what mechanisms are in place to monitor the effectiveness of these measures?

Of course, the industry welcomed the duty freeze, and Oxford Economics has produced research supporting the argument for a beer duty cut, to protect jobs and investment during uncertain times as the UK leaves the European Union. Labour was not opposed to the freeze on beer duty. However, in distributional terms the freeze favoured those who consume more of the relevant types of drinks. The equalities impact statement relating to last year’s freeze noted that

“any changes to alcohol duties will have an equalities impact that reflects consumption trends across the adult population”,

but it failed to outline what the specific equalities impact is with regard to gender. It would be helpful to get that assessment at some point. Data from the Office for National Statistics show that wine, the tax on which was not frozen, is the most popular type of drink among women, while the most popular types of drink among male drinkers of all ages are normal-strength beer, lager, cider and shandy. We must take that factor into account as well. Additionally, many trade bodies have questioned why wine has been singled out for a duty rise, and I invite the Minister to comment on that issue, either today or in the future.

Of course, it is only proper to point out the Government’s continuing duty of health care, and I will re-emphasise that. It is absolutely crucial, but having said that, let us strike a balance. The Government acknowledged in their policy paper that the freeze last year was

“likely to lead to a minor increase in overall alcohol consumption”.

Will the Minister provide information on whether such an increase did occur and, if so, what mechanisms are in place to monitor it?

As I have said before, Labour is committed to securing the long-term future of pubs and the wider hospitality sector. Action must be taken to give pubs a fair chance to be profitable and to make a go of things, as well as give some of the independent small businesses a chance to grow, which is absolutely crucial. My hon. Friend the Member for Chesterfield raised the issue of business rate revaluation, which needs thorough examination. I point the Minister in the direction of Labour’s five-point plan, which will be a good starting point for her. We are calling for an overhaul of business rates to support local high streets and small businesses, including pubs and clubs, and I hope she will take these ideas on board, because this debate is not all about beer duty. It is also about helping pubs in a range of other ways.

--- Later in debate ---

[Jane Ellison]

Again, that is perhaps for a wider debate, but, as I recollect from my time as Public Health Minister, the industry was rightly praised for the extent to which it stepped up to address issues with certain products. A lot of alcopop products have been phased out by some producers who decided to change their portfolio. One or two speakers referred to the bigger chains and the fact that they have tried to shift their portfolios as they recognise the challenges that certain products pose, especially for younger drinkers. It is worth putting on the record a recognition of the industry’s actions in that regard, although there is always the challenge to do more.

I hope that I have been able to reassure Members on some issues. In opening the debate, my hon. Friend the Member for St Austell and Newquay said that the industry wanted to make sure it was not overlooked, and I can reassure him that it is not. Its voice is rightly heard loud and clear across the House and within Government. We have regular meetings and dealings with the industry and we listen very carefully to all the points made.

[Peter Dowd]

Will the Minister give way?

[Jane Ellison]

Very briefly.

[Peter Dowd]

I take the point that the Minister makes about the industry not being overlooked, but it is important to put this in context. For example, according to the industry, the business rates rise will put a 15% increase on pubs’ costs and 23% on restaurants’ costs. That is an additional £300 million to £500 million a year. The Minister should perhaps give more consideration to that.

[Jane Ellison]

If the shadow Minister thinks that the Government have not given consideration to business rates in recent weeks, he has not been looking at the newspapers. Of course it is an important issue and we have given consideration to it. Many establishments in different parts of the country will gain from the business rates revaluation. More businesses will see their rates cut or frozen than will see an increase. For those that see an increase, transitional relief is available, so it is important for people to look at that. No doubt people will look at the impact of that fiscally neutral revaluation in their own areas.

To return to my previous point, the industry’s voice is rightly heard loud and clear in Government. It has powerful advocates in all parties in this House. The debate has been constructive and has brought out important issues. I have heard all hon. Members’ contributions today and will take them as representations ahead of tomorrow’s Budget.