Taxation: Beer and Pubs

Toby Perkins Excerpts

Tuesday 31st October 2017 Westminster Hall

[Toby Perkins (Chesterfield) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Dudley South (Mike Wood) on securing this incredibly important debate and the vigour with which he is going about his role as chair of the all-party parliamentary beer group. As chair of the all-party parliamentary group on pubs, I also feel very strongly about the issues that have been raised.

I am not going to repeat all the statistics that the hon. Gentleman laid out. We have already heard many of the financial arguments as to why pubs matter, but the community point is also important. I support the point made by my hon. Friend the Member for Blackley and Broughton (Graham Stringer) about the importance of inner-city pubs. We are seeing so many of them close. We often think about village pubs, but too little is said about those pubs in our communities and on our estates that have really struggled.

It is definitely the case that the pub is the safest place to drink, because there are other things to do there, people do not drink as fast, they have other people around and it is a much more self-regulating environment. That was brought home to me strongly at a meeting I had with a publican who runs the Harley’s bar in Staveley in my constituency. One of his customers had been a regular attender, but stopped going. The publican met him outside the pub as the man was coming back from Morrison’s with bottles of whisky in his bag, and asked him why he was not coming into the pub any more. The man said, “I can’t afford to come in the pub any more.” The publican said that within six months the guy had drunk himself to death, because all those regulating forces were no longer there. The story that we need to get out there is that the pub is by far the safest place for us to drink.

The point about pubs being a big employer of both the young and women has been well made, as has the point about the importance of the pub for tax revenues. I welcome the fact that the campaigning of a wide range of groups finally persuaded the Chancellor to end the beer duty escalator and to cut beer duty between 2013 and 2015. I take issue slightly with what the hon. Member for Dudley South said, because this is a story that I like to tell. The truth of the matter is that the Chancellor who raised most through the beer duty escalator was not Ed Balls but George Osborne. George Osborne took the escalator that Ed Balls had introduced in 2008 and 2009 and escalated it again in 2010, again in 2011 and again in 2012. I support the fact that he ultimately got rid of it, but he milked that cow just as much as Ed Balls did—let us not be in any doubt about that. There was also the big increase in VAT, which has a big impact on our tourism businesses.

The point made by my hon. Friend the Member for Ashfield (Gloria De Piero), and repeated by the hon. Gentleman, about the importance of small breweries’ relief is incredibly important. I really support the fact that the Government have kept that relief.

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[Albert Owen (in the Chair)]

Order. We now resume the debate. Mr Perkins has 41 seconds left, but I will be generous and give him a minute to gather his thoughts. Mrs Anne Main will follow and will have four minutes.

[Toby Perkins]

I will finish with this. We have spoken a lot about beer duty and VAT, but it is crucial that the issue of business rates is addressed in the Budget. Every member of the Conservative party who stood in the 2015 election stood on a manifesto of a comprehensive review of business rates. That seemed to disappear from the 2017 manifesto, but the issue of business rates is crucial. We have the most expensive corporate property tax in all of Europe, and no Government who theoretically profess to be a low-tax Government can continue to see business rates going up in the way that they have. I urge the Government to get away from an over-reliance on business rates at the expense of corporation tax cuts and bring down business rates for our pubs instead.

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[John Grogan (Keighley) (Lab)]

I think that the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) has tempted many of us to renew our acquaintance with pubs in the borders. It is a particular pleasure to take part in the debate, as it was secured by a true champion of the pub—the hon. Member for Dudley South (Mike Wood).

Having retired in 2010 from chairmanship of the all-party group on beer and from Parliament, I might have thought that my days of speaking in such debates were long gone; so I am delighted to say a few words today. In those days I represented the constituency of Selby, which included Tadcaster—still the only town in England that can boast three major brewers. In Keighley, which I now represent, there is one major brewer—Timothy Taylor’s, which dates back to 1858. It is a byword for quality in the beer industry, with brewers who trained at that icon of higher education in brewing, Heriot- Watt University—perhaps the leading university in the field. There was a minor hiccup in relations between Timothy Taylor’s and the all-party group when I voted—it seems so long ago—to ban fox hunting. The then managing director, Charles Dent, promptly resigned his involvement with the group. I can assure the House that this summer in typical Yorkshire fashion, over a pint at Headingley, we let bygones be bygones. I am very much in dialogue with Timothy Taylor’s. There are also breweries such as Wharfedale, Bridgehouse, Wishbone, Haworth steam brewery, Ilkley and, just outside the constituency, Goose Eye.

There has been a lot of talk about statistics; I want to underline just two. One in seven of all the jobs created since 2010 have been in this sector. What has not so far been expressed is how quickly people can rise up this industry; it is, if not unique, then certainly renowned for that. Some £1 billion from Yorkshire goes in taxation from the pubs and brewing industry to the Exchequer—about the same amount that goes from Northern Ireland, as the hon. Member for Strangford (Jim Shannon) said. If only we had a Yorkshire Mayor spending that money! We truly would have devolution.

I want to make four quick points. We should encourage beer exports, and there has been quite a movement towards that from the industry. Some have suggested that export sales should be excluded from the brewers’ volume for duty purposes, as a way of encouraging exports. That should be considered.

The hon. Member for Dudley South was right that under the Labour Government and under the coalition, the beer duty escalator did a great deal of harm. It is good to see the hon. Member for Burton (Andrew Griffiths) in his place, because he achieved what I certainly did not, and I hope that future chairs of the all-party beer group will achieve similar things. He got rid of the beer duty escalator. This is a crucial year for the reputation of the Conservative party and its relationship to the beer industry. Will those three years be known as the Burton interregnum or will we have not just beer duty relief, but rate relief? We clearly need an extension of £1,000 to £5,000 on rate relief this year.

Turning to small breweries’ duty relief, Gordon Brown has been agonising in recent days about his lack of empathy. Whatever the truth of that, he will always be known as the friend of small brewers—it is one of his great legacies—because of that massive change to our economy. At some stage, we will have to look at whether that can be extended. Many family brewers are losing out. They feel that they do not have the advantage of the duty rate relief and do not have the economies of scale that big brewers have.

[Toby Perkins]

Will my hon. Friend give way?

[John Grogan]

I will, in order to gain another minute.

[Toby Perkins]

And because my hon. Friend wants to hear what I have to say, I am sure. On the important point about the relief for small breweries, does he agree that although the policy is excellent, its impact sometimes means that brewers cannot grow any more as they will no longer come under it? Perhaps some kind of tapering to allow brewers to go from small to big would be helpful.

[Albert Owen (in the Chair)]

The hon. Gentleman does not have to take the full minute.