Beer Duty

Jim Shannon Excerpts

Tuesday 7th March 2017 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Sir Roger, and I congratulate the hon. Member for St Austell and Newquay (Steve Double) on presenting his case well. He was certainly a super-sub, so well done to him.

I have been contacted about the beer duty on numerous occasions—a few times by constituents complaining about the rising price of their well-earned beer at the end of a day, but mostly by the hospitality sector and industry, groaning with the weight of trying to inspire growth while being restricted by a seemingly never-ending duty increase, which happens year on year without fail. I would like to give Northern Ireland’s perspective and talk about how important the issue is for us and about the Minister’s responsibility.

I was contacted before the debate by Hospitality Ulster, which is the professional body that represents the hospitality industry in Northern Ireland—its membership consists of pubs, bars, café-bars, restaurants, hotels and major visitor attractions. Tourism is important for us in Northern Ireland, and the hospitality sector’s role is particularly important. Hospitality Ulster believes that it can transform the local economy and create additional wealth and job opportunities. The successful growth and expansion of the industry will have direct financial benefits, but only with the Government’s help and support. That is why the chance to set out the issues in this debate is important and why I am presenting this case on the industry’s behalf.

Figures indicate that there are 45,000 jobs in the hospitality sector in Northern Ireland. That may not seem a lot compared with similar job opportunities across the United Kingdom, but when we pare that down, it equates to one in 20 jobs being sourced in food and drink and the hospitality sector in Northern Ireland, so the importance of this debate is clear. The hospitality sector overall accounts for 60,000 jobs across Northern Ireland and generates some £88.4 million in tax. It contributes approximately £1.1 billion to the Northern Ireland economy and pays out £653 million in wages, keeping people in employment and creating opportunities. Its importance, therefore, cannot be underlined enough.

In my area of North Down and Ards and in my constituency of Strangford, the sector pays some £7 million in tax and provides just over 3,700 jobs. There is potential for so much more, but we need to put in place support networks and help. That is partly about addressing the issue of taxation and duty, which is the key reason why we are here.

The tourism industry in Northern Ireland is competing in a cost-sensitive marketplace locally and globally. High taxation and the additional costs of unnecessary, disabling regulations and outdated legislation directly affect its ability to compete. In addition, the lack of access into and around Northern Ireland limits not only the number of people visiting the country but its residents’ access to the evening economy. Tourism brochures and information indicate that Belfast is one of the best areas for nightlife in the United Kingdom, and there are tremendous opportunities to do much better on access to it.

Much of the responsibility for this issue lies with the Northern Ireland Assembly—these are devolved matters—and I hope that it will soon be up and running; we are in the middle of a process of talks at the moment. However, taxation and duty are major issues for this House to address. Duties on all alcohol products are forecast to raise some £11.2 billion in 2016-17. To split that up, the duties on beer and cider are expected to raise £3.6 billion, whereas the duties on wine and spirits are expected to raise £4.2 billion and £3.4 billion respectively. Receipts from beer and cider duties are expected to rise slightly to £3.8 billion in 2017-18. That is a massive amount of money, and we understand its importance to the Treasury in balancing the books. We also need sustainability for the industry, which is why we want this matter to be looked at.

We need to ensure that this is the last small rise in a series of rises that has seen the price of a pint rise to £3.46, which is 20 times the amount that it would have cost in the 1970s. The hon. Member for Weaver Vale (Graham Evans) referred to those free and easy days, and that is a fond memory of a time when I also had hair. Correct me if I am wrong, but wages have not increased at a similar rate, so people are missing out and publicans are seeing customers sitting at home with a tin of beer at half the price. We have to address that as well. I will come on to that point, because some of these issues could be dealt with in the Budget and, at the same time, the importance of the hospitality sector could be reinforced.

We want to encourage a society that enjoys a drink responsibly. That is what pubs do: people are refused drinks if they are too drunk and car keys are removed, and there are protective barriers when people leave the pub. Pubs and landlords are careful about what they do, and they are responsible. On the other hand, the alcopops sector can have special offers in supermarkets, allowing 20 shots of vodka from a one-litre bottle to be downed for a shockingly small price tag. That issue was highlighted at a reception in Westminster three weeks ago. I was not aware that a big, one-litre bottle—it looked like lemonade, by the way, but it clearly was not—was so cheap and was placed in supermarkets to make it more attractive for people to buy. We have to address these issues. We all have great respect for the Minister, as others have said; she has always done her best in the many portfolios she has held, and I know that she will do the same for us today.

Something is not quite right about how we are approaching this issue. I believe that the duty rises should be put on the alcopops sector, which is often a favourite of under-age drinkers and is often where alcohol abuse takes place. The hospitality industry should be given a break, which may well keep businesses open and attractive to consumers who can put money in the local economy as opposed to the pockets of supermarket shareholders. I am not against supermarkets making money, but something is unfair when there is a clear imbalance.

I oppose any rise on beer duty, and I ask the Government and the Minister to fully consider the needs of this industry, which brings so much into the local economy and has the potential to do so much more if encouraged to do so.

--- Later in debate ---

[Jane Ellison]

I suspect that is a debate for another time. It is certainly a debate in which I took part in my previous role. If the hon. Lady will forgive me, I will stick to the topic of the debate, lest we get drawn into minimum unit pricing, as it is a complex issue.

My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) spoke about the long history of the brewing industry in her constituency. She is another strong advocate for the brewing industry, and she rightly mentioned beer exports, which were worth £531 million in 2015, up 10% on the previous year. I reassure her that no duty is payable on exported alcohol, so the link between duty cuts and exports is not a direct one, although I take her point about general confidence within the industry.

The issue of high-strength alcohol has been challenged. I think the House is unanimous in wanting to tackle excessive alcohol consumption and the related health harms associated with the strongest products. The question is how we do that, but the point has been well made and the Government are of course reflecting on that.

I hope I have covered most of the points raised. I have not been able to respond to the whole thrust of the debate, although more will be said tomorrow in the Budget. The debate has been a valuable opportunity to discuss the issues, and it has been interesting to see so much common ground.

[Jim Shannon]

In my contribution I talked about alcopops—I know that might be a separate issue—and the advantage that high-street supermarkets have over the pubs. Do the Government intend to address that imbalance, the unfair advantage that high streets have over pubs, and the control of the alcohol that is sold?

[Jane Ellison]

Again, that is perhaps for a wider debate, but, as I recollect from my time as Public Health Minister, the industry was rightly praised for the extent to which it stepped up to address issues with certain products. A lot of alcopop products have been phased out by some producers who decided to change their portfolio. One or two speakers referred to the bigger chains and the fact that they have tried to shift their portfolios as they recognise the challenges that certain products pose, especially for younger drinkers. It is worth putting on the record a recognition of the industry’s actions in that regard, although there is always the challenge to do more.

I hope that I have been able to reassure Members on some issues. In opening the debate, my hon. Friend the Member for St Austell and Newquay said that the industry wanted to make sure it was not overlooked, and I can reassure him that it is not. Its voice is rightly heard loud and clear across the House and within Government. We have regular meetings and dealings with the industry and we listen very carefully to all the points made.