Taxation: Beer and Pubs

Baroness Anderson of Stoke-on-Trent Excerpts

Tuesday 31st October 2017 Westminster Hall

[Mike Wood]

I think that is exactly what the Government have done over the past 12 months in changing the rules on permitted development in particular. Obviously, now we have to go through planning processes before pubs can be converted.

The licensees and customers at many of our pubs contribute in both a financial and practical manner to their communities, by funding and running sporting and other activities, such as football, darts, dominoes and cribbage, but also through community activities, a large number of which are run through our pubs. Of course, because pub customers are extremely generous people, initiatives such as PubAid are able to generate about £100 million each and every year for good causes in communities in all of our constituencies.

For all these pubs to flourish and remain at the beating heart of their communities, they need a transfusion of investment and custom that will come with a freeze in beer duty and a reduction in their business rate burden. I have set out why our beer and pub industry is so important economically and socially, but it faces the twin threats that I referred to earlier: the increases in business rates and in beer duty. The three duty cuts, last year’s freeze and the ending of the escalator secured about 20,000 jobs, boosted confidence in our brewing and pub businesses and meant that more beer was sold than would otherwise have been the case, boosting the Treasury’s total tax take, if we include both direct and indirect taxation. On business rates, the Chancellor has already recognised the pain caused to pubs by the disproportionate burden caused by valuation based on turnover; about half of that turnover may be beer duty and VAT that the pub is collecting on behalf of the Government.

The £1,000 pub relief announced in the March Budget is extremely welcome, particularly for smaller and medium-sized pubs. However, it is particularly important that that relief is now expanded and extended, because our pub sector pays nearly 3% of all business rates despite making up just under 0.5% of business turnover. It is hugely, disproportionately overtaxed through business rates.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

Does the hon. Gentleman agree that it is ludicrous that pubs in Stoke-on-Trent pay more in business rates—in fact, more in total—to the Exchequer than Amazon does in its entirety? Stoke is paying more than Amazon.

[Mike Wood]

I could not agree more. The revaluation of business rates was often seen as an issue that affected only businesses in London or the south-east. As for everyone else, it was thought that some gained and some lost out, but that is completely untrue when it comes to pubs, which have experienced huge increases in every part of the country. The 27 pubs run by Black Country Ales across the west midlands and neighbouring counties will have experienced an increase in their rateable value of, on average, 40% by the time the transitional period is over.

--- Later in debate ---

[Mr Nigel Evans (Ribble Valley) (Con)]

It is an honour to follow the hon. Member for Keighley (John Grogan), who is such a champion of the pub and beer industry, and to serve under your chairmanship, Mr Owen. During the last vote, I bumped into the Chancellor of the Exchequer. I said, “Chancellor, come down to Westminster Hall and listen to the debate on the beer duty,” and he smiled. I assume he is not here because he has rushed back to No. 11 Downing Street to pore over a spreadsheet and work out how much extra he can earn for the industry by reducing the taxation on beer—and also how popular he can become with each 1p reduction.

It is also a pleasure to be here with the former chairman of the all-party beer group, my hon. Friend the Member for Burton (Andrew Griffiths), who managed to have three successive 1p beer cuts and a freeze under his chairmanship—no pressure, then, on my hon. Friend the Member for Dudley South (Mike Wood), the current chairman of the beer group!

I get criticised for always prattling on about the pub that I live next door to, the Swan with Two Necks. In an emergency, I can be in that pub in three seconds. I will correct that today by mentioning three other pubs that serve the community that I represent. Alex Coward, the landlord of those pubs, is with us today and has lobbied me about the importance of cutting the beer duty. There is the White Bull at Alston, the White Bull at Gisburn and the Alston Arms at Longridge. I have eaten and drunk in all three of those pubs at some stage. Alex told me about all the charities that they support, from the Brittle Bone Society to the Air Ambulance, to Macmillan, as well as Longridge juniors and Longridge town football club and the local Joanne Smith Wareing cancer charity.

We know that pubs are a focal point for a lot of occasions, such as christenings, funerals, birthdays or just for people coming together. That is how important they are. The current chair of the all-party beer group went through a list of reasons why local pubs are important to the community, so I do not need to repeat those, but I want to stress a number of things about how important the local pub and brewing industry happens to be.

I hope that the Government will look at lower taxation on lower gravity beer. They tried an experiment on beer of 2.8% or less, but it has not taken off. People have not flooded to taste that beer, but I believe there is an audience for beer that is between 2.8% and 3.5% in strength. We are told that the Treasury would love to do it but that it cannot because of the European Union. Well, the good news is that we can all rush to our pubs post-March 2019 and celebrate our leaving the EU, but there are things that the Treasury can do, such as introduce a new rate of 2.8% and 3.5% and have a different rate of taxation on it. I have legal advice stating that the Government can do that, so I hope the Treasury will look at that.

We have argued for lowering the taxation rate generally. Every 1p that it was reduced by in the past created 4,000 more jobs in this area. Let us look again at business rates, which are going to clobber a load of pubs. I am a member of CAMRA. Twenty-one pubs are closing every week and that is a huge loss to the community, particularly when the pub is the only one in a community. It can have a savage impact.

[Ruth Smeeth]

As the hon. Gentleman knows, I am a proud representative of the Titanic brewery in my constituency. For the record, there is no better beer, but it also has a small pub estate, and its business rates have gone up by 37%. That is £70,000 a year that it can no longer invest in its estate or in its people. Surely at this point we need to reflect on what is really happening in the beer industry and what is likely to happen to pubs.

[Mr Evans]

The Treasury really has to take this issue on board. Business rates, the living wage and other costs that are heaped on the brewing and pub industry mean that this has to be looked at carefully. Pubs are closing. I mentioned Alex Coward, who employs 45 people in the local community, and we represent a semi-rural, or rural, area. These are vital jobs in those areas.

A lot of pubs play music and pay their licence under the Phonographic Performance Limited licence. A lot of pubs are now receiving a new notification. If they have a TV on the wall and show live TV—not just the sport, but something else—they are being asked to pay a minimum of £100. The larger the pub, the more they will be asked to pay. As a lot of people have mentioned, it is cheaper for someone to buy beer from a supermarket and then sit at home alone watching a big TV. How miserable is that! We need to do more to incentivise people to use pubs. If that means lowering taxation on pump-pulled beer compared with beer that someone buys in a pack—12 bottles or 24 cans—we need to do that. I am told again that that can happen when we leave the EU in March 2019, and I hope the Treasury will look at it.

Public Sector Pay Cap

Baroness Anderson of Stoke-on-Trent Excerpts

Wednesday 5th July 2017 Commons Chamber

[Elizabeth Truss]

My hon. Friend points out the impact on the overall economy of unsustainable increases. We need to look at the overall package for public sector workers, including the reduced taxes that most public sector workers are paying and improvements in areas such as training, and we need to ensure that any pay raises are sustainable.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I am sure the Chief Secretary agrees that public services are the backbone of our country, but the average full-time public sector employee will have lost £4,073 in real terms by 2020 because of this Government’s decisions. Does she think that that is fair?

National Spitfire Project

Baroness Anderson of Stoke-on-Trent Excerpts

Tuesday 28th March 2017 Westminster Hall

[Royston Smith (Southampton, Itchen) (Con)]

I beg to move,

That this House has considered funding for the National Spitfire Project.

A national monument to the iconic Spitfire is long overdue, and in moving this debate, I hope the House will also consider the 100th anniversary of the Royal Air Force. It is a pleasure to serve under your chairmanship, Mr Davies. The Spitfire, like me, was made in Southampton—I always have to get that in. The prototype was designed by the famous aeronautical engineer—he was also one of the country’s most successful apprentices—R. J. Mitchell, at the Supermarine factory in Woolston, which is situated in the east of the city and the heart of my Southampton, Itchen constituency.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

While Reginald Mitchell was one of Southampton’s most famous apprentices, he was one of my constituency’s most famous residents. Does the hon. Gentleman agree that we have an opportunity for a national celebration of Reginal Mitchell’s contribution?

[Royston Smith]

I agree with the hon. Lady that it is a national monument that we seek. I acknowledge that R. J. Mitchell was born in Stoke-on-Trent. In fact, it was where he started his apprenticeship. However, he designed the iconic Spitfire in my constituency of Southampton, Itchen, which is where I think the monument should be situated.

The Spitfire completed its maiden flight from Eastleigh airport, latterly renamed Southampton airport, on 5 March 1936. With a powerful and instantly recognisable Rolls-Royce Merlin engine and eight machine guns, it was a formidable fighting aircraft in its day. So impressed were the Royal Air Force with the prototype that the Air Ministry ordered 310 Spitfires to be produced at the Woolston factory in Southampton. By 1940, the factory was at full production, employing thousands of technicians and engineers to manufacture the Spitfire. The aircraft had to be built quickly to replace the many being lost during the battle of Britain, so the factory was working flat out. The Nazis knew that, and they also knew they had to stop it. The luftwaffe had been taking catastrophic losses—they estimated that they had lost nearly 1,200 aircraft between July and September 1940 due to allied action—so it was imperative for them to prevent the manufacture of British fighter aircraft.

September 1940 was Southampton’s darkest period of the war. On 15 September the Woolston factory was attacked by 15 luftwaffe bombers dropping 23 bombs. Fortunately, on that occasion they missed their target, but on 24 September 17 enemy bombers managed to reach the south coast and attacked the Itchen and Woolston factories. Two days later the Nazis redoubled their efforts and two waves of bombers got past the British air defences and dropped 60 bombs on the two Supermarine complexes. Both factories were destroyed, and as a result 110 people lost their lives and many more were injured.

The blitz on Southampton was devastating, and the city was hit over and over again, not just because of its Spitfire production, but because of its docks and many other strategic targets. There were 57 attacks documented in all, dropping more than 2,300 bombs. Nearly 45,000 buildings were damaged or destroyed, with most of the city’s High Street devastated. There were reports that the glow of the firestorm as Southampton burned could be seen from as far away as Cherbourg.

After the awful attacks on the Woolston Supermarine factory, the Nazis thought they had succeeded in halting production of the Spitfire. However, they underestimated the British spirit and stoicism, and not for the first time. Under the instructions of Lord Beaverbrook, production was dispersed to sites around Southampton, Hampshire and Wiltshire.

UK Economy

Baroness Anderson of Stoke-on-Trent Excerpts

Wednesday 29th June 2016 Commons Chamber

[Wes Streeting]

My hon. Friend has a great deal of expertise in this area and we take seriously his warnings. I would feel less aggrieved by what he says if it were not for the fact that in the run-up to the referendum these very questions were put to the Secretary of State for Northern Ireland. We were told, “Don’t worry”—which seemed to be the blank cheque; it was said with every promise of the leave campaign—and now we find that we should very much worry.

We should also worry about the reason people voted to leave the EU. Much of it was not about the Lisbon treaty or where decisions are taken. Many people, even with this British Parliament as sovereign as it is today—and as sovereign as it was last week by the way—still do not feel that they have control over their lives and their destiny. I would hazard a guess that when the analysis is done we will be able to map community by community those places that voted leave and those places that have had the hardest time because of the unequal nature of our economy. That should worry us more than anything else. Many people voted leave out of desperation, in the vague hope, in the belief that their circumstances could not be worse than they are today and that our immigration system and the flow of people into this country make them and our economy less well off, rather than better off. That concerns me deeply.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I represent one of the areas that overwhelmingly voted out. Thirty-six per cent. of my constituents earn the living wage and believe that this decision will increase their salaries, yet 7,000 of my constituents are employed in an industry that is already looking to see what happens next, is unstable and is stopping investment. Does my hon. Friend agree that we have to get strong answers from the Government to protect future investment?

Spending Review and Autumn Statement

Baroness Anderson of Stoke-on-Trent Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

I thank my hon. Friend’s Conservative council for the support it gives to the car industry, and I thank him for championing the industry in this House. We have made a commitment not only to maintain the money we are putting into our automotive strategy, but to continue doing so for the next 10 years. Obviously, product lines at JLR and other important car firms take many years to develop and invest in. I am sure that long-term commitment to our brilliant car industry will be very welcome.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

Following on from questions asked by colleagues, led by my right hon. Friend the Member for Don Valley (Caroline Flint), will the Chancellor outline exactly what today’s autumn statement means for cities such as Stoke-on-Trent, sitting between Greater Birmingham and Greater Manchester, with little family silver to sell in terms of assets, and with 94% of my residents living in properties in council tax bands A, B and C? What are we meant to do without the local government block grant and with business rate revenue that will not fill the gap?

[Mr Osborne]

The reallocation of funding within local government continues to support poorer areas of the country such as that represented by the hon. Lady. There is now a huge set of incentives for the local community, local businesses and the local council to grow Stoke-on-Trent and see the benefits. They can work with us to make that happen. I am very happy to discuss what more we can do for Stoke and, of course, what more we can do to ensure that Stoke co-ordinates with Crewe and Cheshire East authority, which my constituency sits in and where there are lots of exciting plans to do more together.

Oral Answers to Questions

Baroness Anderson of Stoke-on-Trent Excerpts

Tuesday 16th June 2015 Commons Chamber

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

12. If he will maintain current levels of and entitlement to child benefit over the next five years.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

As the Prime Minister pledged before the election, this Government will not cut child benefit.

[Ruth Smeeth]

In my constituency, there have been reports of children returning to school in September malnourished because their parents are struggling to afford to feed them. Does the Minister agree that cuts to either child benefit or child tax credit would exacerbate the problem and make the issue of holiday hunger even more common?

[Damian Hinds]

The Prime Minister has made this extremely clear by stating categorically that child benefit stays as is. The most important thing in regard to affordability and household budgets is to increase employment and ensure that people are in good jobs. The Government have also done an awful lot to bear down on household costs to make them more affordable.