Finance (No. 2) Bill

Lee Dillon Excerpts

Committee of the whole House
Tuesday 13th January 2026 Commons Chamber

[Daisy Cooper]

Clause 86 increases the rate of alcohol duty in line with RPI inflation. On paper, that measure might look like a normal, simple uprating policy, but it must be seen for what it really is: in the broader context, it is yet another tax on struggling hospitality businesses and financially stretched customers.

Hospitality is being hammered over and over again with sky-high rents and soaring energy bills, the Government’s unfair jobs tax, and now this business rates bombshell buried in the fine print of the Budget. It matters, and hospitality really matters. It is the only element of pre-pandemic spending that has not recovered. The sector employs huge numbers of young people and part-time workers, often giving people their very first job and their way into longer-term employment.

This is one of the sectors that make life worth living. We all remember the place where we fell in love, or had our first date. I remember the music venue where I found my favourite band. I remember the pub where I sat with my girlfriends and one told me that she was not going to survive her stage 4 cancer—and I remember the spa day that we had when she did. Hospitality is part of who we are as human beings. It is unique in what it contributes to our economy, and we must do everything to support it.

[Mr Lee Dillon (Newbury) (LD)]

If this debate had taken place before Christmas, I would have had to declare an interest, but my father has now sold his majority share in our local pub in our home town, which I think goes to the core of today’s debate: publicans are leaving the sector. My hon. Friend has been talking about the importance of hospitality. My father’s pub used to host bingo nights on Thursdays and bingo on Sunday afternoons, and on those occasions we would see people there who would never go at other times of the week. Does my hon. Friend agree that the sense of community that pubs build is crucial, and is under threat from this Labour Government?

[Daisy Cooper]

My hon. Friend is absolutely right. Pubs are irreplaceable, and when a pub goes a community falls apart. Pubs are vital as part of the social fabric: they are the glue that holds our communities together, and we must protect them. We tabled new clause 9 because we want the Government to look at and

“report on the cumulative impact on the hospitality sector of alcohol duty measures”

alongside all the other “wider fiscal changes”, including the higher national insurance contributions and the business rates changes. This really matters.

--- Later in debate ---

[Gareth Snell]

It is a pleasure to follow my county colleagues, the hon. Member for Kingswinford and South Staffordshire (Mike Wood) and my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier). Stoke-on-Trent and Staffordshire as a county are rich in the heritage of brewing. Burton is a prime example of that, but in Stoke-on-Trent we too have some wonderful small brewers, such as Titanic, which has sadly shared with me the business rate increases that it faces, with a 450% increase in some of its venues.

That is a challenge that those venues have to face, and I hope the Government will look seriously at finding a realistic workable solution. The value of pubs in our communities is not just about the pints that they sell, but about the people they look after, such as the old gent nursing a pint for a couple of hours and being looked after by the bar staff. We lose that at our peril.

I will restrict my comments to the differential between cider rates and beer rates. One of the things that the Treasury has done for many years, including under the Conservative Government, is to keep an unfair differential between the rate of duty applied to cider and that applied to beer. That came in during the coalition Government and I can only presume that it had something to do with the number of Lib Dem seats in the south-west. The point remains, however, that a small beer producer—a small brewery—in the UK will pay more in duty on the pints it produces than a global cider manufacturer, because of the differential points at which the relief comes in.

[Mr Dillon]

Under this Government, we also have the situation whereby champagne in France is taxed at 40% less than sparkling wine is taxed in this country. If we are levelling the playing field, does the hon. Gentleman believe that the Government should also level the playing field for English sparkling wine so that it can compete with champagne?

[Gareth Snell]

There is a danger here of getting into the inevitable jokes about champagne socialism, but I understand the hon. Gentleman’s point. He is right: there needs to be fair play. If we even out the taxation across the sector, that means that we can have targeted support in other areas where we know that there should be an unfair advantage for certain things. For instance, as the hon. Member for Kingswinford and South Staffordshire said, we should encourage and support making greater use of the draught relief for those selling alcohol in a pub.

Currently, 61% of cider producers produce less than five hectolitres of alcohol, which means they get a 100% reduction in the duty they pay. That is why we could increase or level out the rate of alcohol duty on cider and beer producers without impacting the small cider producers in this country. It would only impact the global manufacturers which, frankly, are taking a profit and making, I would argue, a substandard product, or trying to hide a mass-produced product behind a local label, which is often the case.

Under the Government’s proposal, the duty will be £10.39 per litre for cider and £22.58 for beer, and that differential grows every year. Because it is uprated by an inflation percentage, over the past few years the rate between the two in cash terms has just got bigger and bigger. It is a disadvantage to small brewers, who produce good quality beer, that they pay a rate of alcohol duty equivalent to the global cider manufacturers. SIBA estimates that the levelling of that figure could generate £360 million per year. That money could either go towards reducing the rate overall for all levels of duty, or it could further reduce the draught relief so that there is a clear and meaningful differential between those selling alcohol in pubs and those selling it in supermarkets.

There are some brilliant pubs in my constituency, the Greyhound in Hartshill being the one that I frequent the most. It is a community venue, and if it has to pay greater levels of duty on alcohol as a result of this Budget, I am sure it will find a way of doing so, but if there was a way of encouraging more people to go to that pub because the rate of duty on that pint was lower and it was subsidised by the big cider producers selling to the supermarkets, it seems to me that that would be a fair thing to do.

There is also a non-tax measure that the Government could introduce to support small brewers across the country, and it would cost the Government nothing. The market access review is currently sitting on a desk in the Department for Business and Trade, and it would guarantee that small brewers could have access to pubs in their locality to guarantee guest ales. I believe that Scotland already has this mechanism and that it is working well—unless someone can tell me otherwise. If we could replicate that in England and Wales, it would mean that those small independent brewers would have an opportunity to sell more beer in pubs, where a lower rate of duty would be applied to the product. That would help them with their business. It would give publicans an opportunity to increase the range of beers they sell, which would then help to attract more people into those pubs. It would mean that we would have more small independent brewers in this country selling more pints of beer, which supports them as employers and as good companies, such as Titanic in my own city.