Beer Duty Escalator

Hazel Blears Excerpts

Thursday 1st November 2012 Commons Chamber

[Hazel Blears (Salford and Eccles) (Lab)]

My hon. Friend is making a powerful case. I have had the pleasure of visiting his constituency and having a drink of beer in Hartlepool at the time of his election. My community in Salford and Eccles is similar to the community in Hartlepool. We have a great brewery, Joseph Holt, which just this year has been forced to get rid of 11 pubs, with the loss of 94 jobs, at the same time as seeing massive increases in duty. Does my hon. Friend agree that the escalator is punishing communities in poorer areas such as ours, where people’s wages have not kept pace with duty increases?

[Mr Wright]

My right hon. Friend is exactly right. She mentions the importance of the pub trade in the local economy—the economies of Salford and Hartlepool are very similar—but she also talks about breweries, which brings me to my next point.

We have a major brewery in my constituency: Camerons brewery—I am pleased to confirm to the House that it has nothing to do with the Prime Minister, thank goodness. Camerons brewery has been on the same site for more than 140 years, using the unique Hartlepool water from its own well to make the beer. It now employs 100 people and is involved in large-scale ale and lager production. Not only does Camerons produce quality ales of its own—I would recommend to hon. Members Camerons Strongarm and 6th Sense, which are particularly good pints—but its modern manufacturing facility and investment in plant means that the brewery is now capable of producing 1.3 million hectolitres per annum, with the potential to increase that, given certainty in the brewery trade, to 2 million hectolitres. Camerons has been well positioned to win orders for beer and ale production from global brands such as Carlsberg. The brewery continues to be—and has been for the best part of 150 years—an important part of the town’s manufacturing base.

--- Later in debate ---

[Grahame M. Morris (Easington) (Lab)]

I wish to place on record my thanks to the hon. Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing this debate, and I congratulate them on doing so. I also thank the Backbench Business Committee for allowing this important and timely debate to take place. I realise that the Minister is relatively new to his position, but he should know that these arguments were made when clause 186 of the Finance Bill was debated. Similar arguments were pursued by my good self and by my hon. Friends the Members for Livingston (Graeme Morrice), for Gateshead (Ian Mearns) and for Wansbeck (Ian Lavery). I ask the Minister to have a look at those arguments and to review the decision, as that would be extremely helpful.

I was rather alarmed to hear the hon. Member for Leeds North West suggest on a point of order earlier that the Government were not giving serious consideration to issues chosen for debate by the Backbench Business Committee. I hope that is not the case, because there is a powerful case for the Minister to consider the House’s decision on this motion.

I must declare an interest as the vice-chair of the all-party save the pub group. I am also a member of the Working Men’s Club and Institute Union, and as such I am very concerned about the impact of the beer duty escalator on working men’s clubs—this was also raised by my hon. Friend the Member for Midlothian (Mr Hamilton). Nobody in this House can be in any doubt about the impact of the current economic climate and, in particular, the beer duty escalator on the pub trade—the Minister certainly cannot, unless, like the Olympic flame, he does not go out. [Laughter.]

It is apparent that since the beer duty escalator was introduced in 2008 a range of new and demanding costs have been applied across the industry. Like many hon. Members, I have received briefings from the British Beer and Pub Association and, through the all-party save the pub group, I have had discussions with stakeholders. It has been pointed out to me on numerous occasions that inflation has risen, VAT has increased and brewing costs have risen, whereas incomes have fallen right across the sector. The fuel duty increases have also had an adverse impact on delivery costs.

[Hazel Blears]

My hon. Friend is clearly well versed and an expert on these issues. As well as the economic costs, there are clearly important social costs to our pubs closing. A constituency such as mine has only a handful of remaining public houses, many of them intimidating places where the general public do not want to go. Will he therefore support communities that want to take over those pubs and bring them back to life, as we are trying to do with the Woolpack pub in Salford?

[Grahame M. Morris]

My right hon. Friend makes a really good point, and I hope the Minister is taking note.

As we all know from our constituencies, pubs are a vital part of our social life and a social hub. No matter what sort of area we represent, be it Labour, Tory, Lib Dem or nationalist, be it in the north or the south, be it countryside or urban and be it wealthy or poor, public houses are the hubs of our communities. Just as important is the fact that pubs and brewing are vital to the UK economy. Other hon. Members have mentioned the figures, so I will not repeat them, but the sector makes a huge contribution—I believe it is in excess of £20 billion. I believe that the Minister acknowledges that the proposals in the beer duty escalator would be revenue-neutral—they would not generate any additional revenue for the Treasury—so what can be the justification for continuing with it? The only answer I can come up with is that this is part of another public policy agenda—perhaps the Minister can enlighten us. Might it be an issue of public health? Perhaps the Government think it desirable to force up the price of alcohol to dissuade people from consumption. We have heard from various hon. Members that the consequence has actually been the reverse, so perhaps this is a perverse application of policy, resulting in the public buying beer, wine and spirits from the supermarkets in cut-price deals, and consuming them at home. There is a strong case for reviewing the escalator.