Mike Wood
Main Page: Mike Wood (Conservative - Dudley South)Department Debates - View all Mike Wood's debates with the HM Treasury
Beer Taxation and Pubs
Mike Wood Excerpts(5 years ago)
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Mike Wood (Dudley South) (Con)
I beg to move,
That this House has considered beer taxation and pubs.
I am delighted to have secured this important debate, alongside the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and my hon. Friend the Member for Ribble Valley (Mr Evans), and I am grateful to the Backbench Business Committee for allocating us this time.
In the short time that I have available, I hope to set out a compelling case as to why the Minister should recommend to the Chancellor that he cut beer duty in future Budgets, reform business rates and continue to look at new ways of reducing the disproportionate tax burden on pubs and breweries. Representing a Black Country constituency as I do, and as chair of the all-party parliamentary beer group—the largest Back-Bench all-party group in this House—I know what an important issue this is for many of our constituents. My own Dudley South constituency is home to three very distinct and individual brewers: Bathams, dating back to the 1860s; Black Country Ales, which is a much more recent and fast-growing brewery; and Ma Pardoes, one of the original Campaign for Real Ale breweries.
Kevin Brennan (Cardiff West) (Lab)
I congratulate the hon. Gentleman on his great work as chair of the all-party parliamentary beer group, of which—like many other hon. Members—I am a member. Does he agree that, although it is very welcome that the Government extended rates relief to pubs, it is disappointing that they did not also extend it to small music venues, where people often also drink the occasional beer?
Mike Wood
Of course, the business rates relief extension was part of the support for high streets and community pubs in particular. I think there is a particular value to that, but I certainly would not be opposed to the kind of measures to which the hon. Gentleman has referred.
When we last debated beer duty in this House—in Westminster Hall in October 2017—I said that there were 75 pubs in my constituency. I am afraid that there are now only 73, despite my very best efforts.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The hon. Gentleman talks about disappearing pubs in his constituency. A person does not actually have to be a drinker to enjoy the benefits of pubs. Jo Cox, our late and much missed friend, talked about the loneliness agenda. I am a non-drinker, but I am very upset that we are losing the Goldsmiths Arms in East Acton, which has been there since 1826 when it was a coaching inn. The petition to keep it open has been signed by 2,180 people, but under this Government it often feels that people power and planning law are in conflict, and greedy developers often have too much power on their side.
Mike Wood
I would caution against trying to turn this into a party political issue, because although the number of pubs is still reducing at far too high a rate, it is a rather slower rate than was the case before 2010. There are a number of factors that lead to pub closures, some of which are more in the control of the Government and public authorities than others. Where the Government can act to slow down, stop and reverse pub closures, I would very much encourage them to do so.
Sir Greg Knight (East Yorkshire) (Con)
Does my hon. Friend agree that the closure of a public house often has a far more devastating effect in a rural area, where the pub is the centre and heart of the community, often acting as a shop, a music venue and a tavern to the local people?
Mike Wood
My right hon. Friend is quite right. I will speak about the particular importance of rural community pubs later, but pubs are often key to local identity even in our towns and high streets. In fact, more people probably give directions with reference to pubs than to road names.
Stephen Crabb (Preseli Pembrokeshire) (Con)
My hon. Friend is making a superb speech, as always. On the subject of the decline in the number of pubs, we should not forget that one area of enormous growth in the industry over the last 10 years is the proliferation of craft brewers. I am sure that every single Member here has an excellent craft brewery in their constituency, and these breweries often run tap houses. Does my hon. Friend recognise the importance of the small brewer’s relief to the growth of craft brewers, and will he make that part of his discussion with the Chancellor and the Treasury?
Mike Wood
My right hon. Friend pre-empts the later part of my speech, and the hon. Member for Stoke-on-Trent North is similarly indicating that she may just touch upon this topic later. Yes, the rise in the number and variety of smaller breweries, and particularly craft breweries, over the last decade and a half has been one of the key features of the sector. This is partly down to the success of the small brewer’s relief.
Toby Perkins (Chesterfield) (Lab)
I congratulate the hon. Gentleman on securing this important debate. He is absolutely right about rural pubs. However, the importance of the last pub on the council estates in many of our towns is often overlooked. The last pub has closed on many of those estates, and that has a huge impact on the facilities available for people to get together. Although I entirely support what he says about rural pubs, let us make sure that we do not forget the issue with regards to council estates.
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. Mr Perkins, if you want to speak, we are on a five-minute limit. I do not want to have to drop people down the list; I want everybody to have the same fair chance. If those who are speaking would take fewer interventions, it would help us all.
Mike Wood
I consider myself duly reprimanded, Mr Deputy Speaker. Suffice it to say that, once again, I strongly agree with the hon. Member for Chesterfield (Toby Perkins), as I have also seen the impact of derelict pubs of varying sizes standing monument within housing estates and town centres across the Black Country.
Stephanie Peacock
I congratulate the hon. Gentleman on securing this debate and on his powerful speech. The Black Bull pub in Barnsley East closed last year, and the 250-year-old building is due to be demolished. Does he share the sadness, and what does he think we can do to improve the situation?
Mike Wood
I share the sadness whenever a well-used pub closes for any reason, and there is a particular impact on the community when that pub is a heritage building in a town, city or village.
Last autumn, 116,000 people up and down the country signed the Long Live the Local campaign—many of them emailing their MPs. It was launched by Britain’s Beer Alliance, and quickly garnered public support from licensees, beer drinkers and many more groups. I know that the success of that petition due to everybody who united behind the campaign was pivotal in persuading the Treasury of the need for action to support beer and pubs. I am delighted that the Chancellor listened to those passionate calls and froze beer duty once again.
The beer and pub sector is vital to our country. Nearly 900,000 people up and down the United Kingdom rely on the industry for work; 43% are younger people aged 16 to 24, and more than half are women. Supporting the pub trade is a fantastic way to reduce youth unemployment and develop skills among young people. This House saw at first hand the impact of apprenticeships across the hospitality sector and the opportunities available, during the apprenticeship showcase in National Apprenticeship Week.
Mr Marcus Jones (Nuneaton) (Con)
My hon. Friend is making an extremely good point about the opportunities for people in the industry. Does he agree that this is one of those industries where someone can quite literally start behind the bar and end up as the chief executive or the chairman of quite a big company?
Mike Wood
My hon. Friend is spot on. When I was helping to judge the parliamentary pub chef and young pub chef of the year competition this time last year, we spoke to a number of people who were not yet in their mid-20s and were not only running their own kitchen but, in a number of cases, were now running multimillion-pound turnover businesses in their own right. There are very few other sectors where people can go into an industry at a young age with next to no start-up capital and have such opportunities for rapid career progression resulting in running their own business.
Brewing is also a true success for home-grown British manufacturing. A staggering 82% of all beer consumed in this country is made in this country, and we have over 1,800 breweries in the UK, 149 in the west midlands alone. In my own constituency, the sector accounts for 1,068 jobs, 315 of them held by people under 25. It contributes over £34 million in gross value added to the Treasury’s coffers, for which I am sure my hon. Friend the Minister is very grateful. Nationally, the sector adds nearly £23 billion to the UK economy and contributes almost £13 billion in taxation to the Treasury. Some of us would argue that that is a little disproportionate. One in three pounds spent in pubs goes straight into Treasury coffers, with an average of £140,000 for every pub in the country being raised for the taxman every year. I therefore strongly welcome the Chancellor’s announcement of a review of small brewer’s relief.
Peter Aldous (Waveney) (Con)
Small brewers such as St Peter’s in my constituency have a proven track record in exporting their beers all around the world. They could expand, open up new markets and create more jobs if export volumes were excluded from small brewer’s relief. Does my hon. Friend agree that the Treasury should consider this exclusion as part of their review of small brewer’s relief?
Mike Wood
I thank my hon. Friend for raising that point, which is one of those that needs to be considered. I understand the Treasury’s concerns about the risk of fraud, the ability to actually enforce it, and particularly, at the moment, legality under the current European duty framework.
Beer duty has divided this House in the past, but there is now a general agreement on all sides that it is already high and we certainly need to avoid rises. When the hated beer duty escalator was introduced by Gordon Brown, beer duty rose by a staggering 42%, while beer consumption in the UK fell by 16% overall and by nearly a quarter in our pubs. Almost 7,000 pubs called time for good, and more than 58,000 beer-dependent jobs were lost. This was a very expensive policy failure, and the price was paid by beer drinkers, publicans and employees alike. I am delighted that, as a country, we are now drinking more beer but also paying less tax on it as a proportion of the cost. However, the amount of this beer being sold in pubs continues to fall, and while the rate of pub closures has slowed, as I said, they are still closing at a disturbing rate.
Helen Whately (Faversham and Mid Kent) (Con)
I commend my hon. Friend on his speech. Pubs are very important in my constituency, where the brewery Shepherd Neame is the largest employer as well as the producer of excellent beer. I see colleagues nodding. Lower-alcohol beers are becoming increasingly popular, so does he agree that there may be a case for looking at the threshold at which brewers get duty relief for such beers?
Mike Wood
My hon. Friend is absolutely right. I know that my hon. Friend the Member for Waveney (Peter Aldous) would also agree, with St Peter’s being a major advocate of this argument as well. The European Union, within its beer duty framework, is in the process of changing those thresholds. I would hope that the Treasury, regardless of what form of Brexit we end up with, will make sure that, at the very least, we follow the mechanisms that are already in place, amending the threshold for low-alcohol beers to one where it is rather more viable for brewers to produce at that strength. Encouraging people to go down from over 4% to around 3% is better for their health, and if we can make sure that it is fiscally better for the brewer as well, then so much the better.
As CAMRA has made clear, one of the opportunities as we leave the European Union—we know from last night’s discussion that there is an element of disagreement as to what should happen next—is that we are able to take back control of our excise duty regime. This gives the Chancellor an opportunity to look afresh at how we tax beer in pubs, in particular—how we can use fiscal measures to help pubs to thrive, to support responsible drinking, and to redress the competitive disadvantage that our community pubs have as against, in particular, supermarkets that are able to stack drinks high, sell them below cost, and use them a loss-leader.
Mary Glindon (North Tyneside) (Lab)
Does the hon. Gentleman agree with Colin Shevills of Balance North East, who commissioned an independent survey of publicans, that it is cheap alcohol—cheap booze—in the supermarkets that is most dangerous to our pubs and causing more closures than alcohol duty?
Mike Wood
There is a range of factors. Beer duty is certainly part of it, but business rates are a massive factor in the pressures affecting our pubs. For these pubs to flourish, to remain the beating heart of our communities, and to continue to compete as businesses, they need the investment that comes, and is only possible, if the tax burden is kept at a sensible level.
Mike Wood
I really cannot—I ought to have finished by now.
The three duty cuts and two beer tax freezes that we have seen under successive Conservative Chancellors have secured thousands of pub jobs and hundreds of pubs. They have boosted confidence in our brewing and pub businesses, which have continued to invest in the sector. They have increased beer sales, boosting the Treasury’s total tax take from beer. This is a win-win situation, and I encourage the Minister and the Chancellor to win even more by giving us a fair deal on beer taxes. I ask the Minister to encourage the Chancellor to go further. Hard-pressed UK beer drinkers still pay 40% of all Europe’s beer duty despite drinking only 12% of the beer consumed. One could argue that 12% is possibly not yet enough. Crucially, seven in 10 alcoholic drinks sold in pubs are beer. By helping British beer, we are helping British manufacturing and also helping our community pubs. We have to address business rates. We need fundamental reform. The relief announced in the Budget last autumn was enormously helpful, with about 80% of pubs benefiting, but they are still hugely overtaxed. Despite only making up about 0.5% of total business turnover, our pubs represent nearly 3% of all business rate payments.
Beer and pubs are a great British success story. We can help them to prosper and to succeed if we can spare industry and consumers from the burden of high beer duty and unfair business rates, and use our duty framework to support our community pubs. I thank the Backbench Business Committee for finding the time for this debate, thank Members for supporting it, and look forward to the Minister’s response.
Several hon. Members rose—
Mike Wood
I thank all right hon. and hon. Members for their contributions today. We have had well over 20 contributions from Members representing six out of the seven parties in the House and all four nations of our United Kingdom. The contributions from the Minister, the shadow Minister and the SNP spokesperson, the hon. Member for Aberdeen North (Kirsty Blackman), showed the breadth of agreement and support for British beer and pubs and the need for us to support them where we can.
If people watching this debate take away just one message, I want it to be that British beer and pubs are a force for good in so many ways. As the hon. Members for Heywood and Middleton (Liz McInnes), for Chesterfield (Toby Perkins) and for Aberdeen North said, they are good for jobs and local economies. As my hon. Friends the Members for Cheadle (Mary Robinson) and for St Albans (Mrs Main) pointed out, they are good for communities and for families. My hon. Friend the Member for Ribble Valley (Mr Evans) said that pubs are good for charities and for community sport, the hon. Member for West Bromwich West (Mr Bailey) said that they are good for promoting local investment, and the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said that they are good for attracting tourism.
There are other non-economic benefits, too. As the hon. Members for Stoke-on-Trent North (Ruth Smeeth) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney) pointed out, they are essential for tackling loneliness and strengthening the social fabric. The hon. Member for Strangford (Jim Shannon) referred to the vital role that good community and high street pubs play in offering a safe place for responsible drinking. Pubs are a force for good in so many ways. Think just how much more good they could do if we can get the tax burden under control, give our beer and pubs a fair deal, and support these key industries and the role that they play in our communities.
Question put and agreed to.
Resolved,
That this House has considered beer taxation and pubs.