Beer Duty Escalator

Brian H. Donohoe Excerpts

Thursday 1st November 2012 Commons Chamber

[Andrew Griffiths (Burton) (Con)]

I beg to move,

That this House welcomes the essential contribution of brewing and pubs to the UK’s economy in providing one million jobs; notes the 42 per cent increase in beer duty since 2008 and HM Treasury forecasts that have shown that there will be no additional revenue generated from beer duty despite planned increases over the next two years; is therefore concerned about the effectiveness of this policy in tackling the Budget deficit, its impact on valued community pubs and the continued affordability of beer in pubs; and therefore urges the Government to support the UK’s beer and pub sector by conducting a thorough review of the economic and social impact of the beer duty escalator to report back before the 2013 Budget.

I begin by thanking the Backbench Business Committee for giving us the opportunity to debate this important issue on the Floor of the House. I know from the number of e-mails and telephone calls that I have received that publicans, brewers and people in pubs up and down the country are tuning into the Parliament channel to listen to the debate, such is their level of interest. I commend the Backbench Business Committee for giving us this opportunity.

Colleagues will know that the debate is a result of the fact that 104,000 people have signed a petition demanding the scrapping of the beer duty escalator and calling for the issue to be debated on the Floor of the House. I congratulate everybody who took the time and opportunity to familiarise themselves with these issues and sign in support of their pubs and breweries. Of course, 104,000 signatures do not appear overnight. I pay particular tribute to the work of the British Beer and Pub Association; CAMRA, the Campaign for Real Ale; SIBA, the Society of Independent Brewers; and brewers such as Hobgoblin, which has done so much to raise the profile of Britain’s brewers.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

I must declare an interest as secretary of the all-party Scotch whisky and spirits group. This issue affects Scotch whisky as well as beer. The whole whisky industry employs some 34,000 people in this country, and they are being affected too. Will the hon. Gentleman include them in his plea to the Government to look again at the escalator?

[Andrew Griffiths]

I completely understand the hon. Gentleman’s wanting to defend an important industry in his constituency, but I gently point out to him that the Scotch whisky industry had a 10-year freeze on duty under the previous Government, that 95% of Scotch whisky is exported, and that spirits have now become the drink of choice for young people across the country. I am making the case on behalf of the brewing industry, which has been so badly served.

--- Later in debate ---

[Andrew Griffiths]

My hon. Friend has put his finger on the nub of the problem. I want to remind the House that when the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), introduced the beer duty escalator he said that,

“as incomes have risen, alcohol has become increasingly more affordable…In order to ensure that alcohol duties keep pace with rising incomes, alcohol duty rates will increase by 2 per cent above the rate of inflation”.

[Mr Donohoe]

Will the hon. Gentleman give way?

[Andrew Griffiths]

If I could finish my point, I will then give way. The reality is that since the introduction of the beer duty escalator in 2008, beer duty has increased by a crippling 42%.

--- Later in debate ---

[Andrew Griffiths]

The hon. Gentleman makes a valid point. We should consider the impact that the beer duty escalator has had on our brewers.

[Mr Donohoe]

Will the hon. Gentleman give way?

[Andrew Griffiths]

I would like to make a little progress, if I may.

Since the introduction of the beer duty escalator, beer sales have reduced by 16%. To put that in perspective, it is the equivalent of the loss of 1.5 billion pints as a result of the beer duty escalator. To put it another way, it is the equivalent of one major brewery in our country closing every year since the introduction of the beer duty escalator.

[Mr Donohoe]

Will the hon. Gentleman give way?

[Andrew Griffiths]

The hon. Gentleman is quite exercised, so I will give way to him.

[Mr Donohoe]

I am very grateful to the hon. Gentleman for giving way. Will he reconsider his previous answer to me? Scotch whisky is the heaviest taxed of all the spirits, beers, ciders and wines in this country. [Interruption.] It is the heaviest taxed.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman will sit down. We are not discussing duty on whisky, as much as some Members would like to discuss it. We will keep to the debate, which is about beer duty and pubs.