Beer Duty Escalator

Caroline Nokes Excerpts

Thursday 1st November 2012 Commons Chamber

[Caroline Nokes (Romsey and Southampton North) (Con)]

I pay tribute to my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate. I agree with the hon. Member for Easington (Grahame M. Morris) that this is a powerful and important message for the Minister.

I also want to pay tribute to the right hon. Member for Southampton, Itchen (Mr Denham), my immediate constituency neighbour, who drew attention to the conversion of The Woodman pub in my constituency to a Tesco. I remind him that The Castle Inn has on occasion—I recollect this from the 2001 general election—played host to a polling station, which is evidence of a pub playing its role in the big society.

Historically, Romsey is a brewing town. I vividly recall from my primary school days the smell of the brew from Strong’s brewery hanging over the playground. On my 11th birthday the last brew began at Romsey brewery, but I am pleased to say that after a short gap Romsey is now host to a micro-brewery in Flack Manor, which brews some wonderful ales. The proprietor of Flack Manor, Nigel Welsh, and publicans in Romsey and Southampton North have forcefully told me that the beer duty escalator is deeply harmful to their commercial success. They are not alone; their opposition is shared by such august organisations as CAMRA and the Society of Independent Brewers.

The pub trade employs nearly 1,000 people in my constituency and contributes more than £14 million to the local economy, but publicans tell me that their trade is held back by a policy based on false assumptions about its social, economic and health benefits.

[Mr Robert Buckland (South Swindon) (Con)]

My hon. Friend highlights the contribution made to her local economy. In Swindon, 1,425 people are employed by the brewing and pub industry, which adds about £17.2 million to our local economy. The issue touches not just Romsey but every community in the country.

[Caroline Nokes]

My hon. Friend makes an excellent point. The economic argument is also flawed. As we have heard many times today, the amount of money raised through the Exchequer since the rise in beer duty in 2004 has failed to match the predicted levels of revenue. That has cost 5,000 jobs a year and VAT revenue has been lost through reduced beer sales.

The basic laws of supply and demand dictate that if the price of a commodity is increased, demand will fall. Demand for beer in pubs certainly has fallen. I am not suggesting that the beer duty escalator was the sole reason for the closure of pubs such as The Vine Inn in Stockbridge, or The Wheatsheaf in Braishfield, which has fortunately now reopened, but figures show that, despite the Olympic games and Euro 2012, in the three months to October this year pubs sold 117 million fewer pints than in the same period last year. I am not suggesting that nationally we are drinking less beer; we are simply changing our habits, giving an advantage to supermarkets over the traditional pub.

Before the introduction of the escalator, it was four times more expensive to drink in a pub than at home, but it is now 10 times more expensive. Beer sales in pubs are falling and the proportion of alcohol consumed outside that responsible, supervised environment is increasing. That brings me to my second point, about the benefits of the escalator to health and social policy. I believe that that merits close scrutiny. A recent study of the impact of alcohol pricing on consumption in Sweden produced some interesting results, showing mainly that increasing the price of alcohol in an attempt to reduce consumption might actually have the opposite effect, since drinkers who were buying more expensive brands simply switched to cheaper drinks and as a consequence bought and drank more. In other words, making it more expensive to drink in pubs simply pushes people to drink cheaper alcohol and possibly fuels binge drinking.

Binge drinking is a real and growing problem. Just last night Romsey police tweeted a picture of a massive quantity of alcohol they had seized from under-age drinkers. The beer duty escalator does nothing to prevent that. I give full credit to the local police for their action, and I encourage hon. Members to look at that photo on Twitter. It does not show alcohol bought at a pub—far from it. The cut-price bulk offers on alcohol in supermarkets often encourage parents to buy more, and that means easier access to large quantities of alcohol stored at home.

According to data from the World Health Organisation, alcohol consumption in the UK increased by approximately 4% between 1985 and 2003, whereas in Europe it decreased. Over the same period, alcohol-related harm has grown. For example, there were 8,758 alcohol-related deaths in 2006, twice as many as 15 years previously. The Government know this: in a preliminary assessment of the economic impacts of alcohol pricing policy, published by the Home Office in June 2010, the conclusion stated that duty increases are

“a ‘blunt instrument’ that does not target those drinkers who cause harms”.

The tax raises little revenue, causes unemployment and encourages binge drinking on cheap alcohol—and the taxpayer has to bear the burden.

I am on record as supporting minimum pricing for alcohol, but that does not in any way contradict my support for a review of the beer duty escalator. Major supermarket chains, such as Tesco, ruthlessly promote cut-price deals, so it is not the traditional public house, supplied by excellent local breweries, that promotes excessive drinking, but the supermarkets, which use their ability to buy and sell alcohol cheaply, often as loss leaders, to the detriment of the local pub, the local economy and the local community.