Beer Duty

Debate between Wera Hobhouse and Mike Wood

Tuesday 15th July 2025 Westminster Hall

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests. I have also received hospitality from CAMRA, the BBPA, UKHospitality and probably the Society of Independent Brewers and Associates. I rise to speak not only as the Member of Parliament for Kingswinford and South Staffordshire, but as someone who had the honour of chairing the all-party parliamentary beer group for more than five years. During that time, I worked with colleagues across the House to ensure that our brewers, pubs and beer lovers had a Government that understood their value to communities, our economy and local culture.

Under the previous Government, real progress was made on duty. We delivered reforms that simplified beer duty, recognising the unique role that pubs and small brewers play in British life. We implemented draught relief, giving pubs a competitive edge and encouraging the sale of lower-strength beer on tap. Crucially, there was a series of freezes and cuts to beer duty year after year, scrapping Gordon Brown’s damaging beer duty escalator and meaning that, by the time of the last election, the duty paid on a pint of real ale in a pub was lower than it had been 12 years earlier.

We embraced the freedoms afforded to us post Brexit to create a more proportionate, strength-based alcohol duty system, designed to support responsible consumption and encourage the production of lower-strength drinks, while putting pubs and licensed premises on a fairer footing compared with supermarkets and off-licences.

[Wera Hobhouse]

Does the hon. Gentleman agree that, although beer duty seems to target large brewers, it quickly trickles down and hits the much smaller venues and brewers disproportionately hard?

[Mike Wood]

The hon. Lady is completely right because of the margins that such brewers operate on. The concern now is that, if reports are correct and the Government are considering beer duty as a revenue raiser to fill the gap in the Chancellor’s budget, so much of the progress will be put at risk.

Since the Government took office last July, almost every decision that the Chancellor has taken seems to have gone in the wrong direction when it comes to supporting pubs, hospitality and brewing. Just months into office, the Chancellor confirmed that beer duty would rise in line with the retail prices index from February this year—a sharp and sudden shift, which wiped out so many of the gains. That really needs to be a one-off because the return of automatic uprating every year would be a real betrayal of both the brewing industry and consumers. It would mean higher prices at the local, more pressure on struggling pubs and reduced confidence for independent brewers. That would be not just bad policy but economically incoherent. While costs are high across the supply chain and the Government are piling further costs on to pubs and brewers through wage costs, the Government have decided to add further instability and more tax, rather than consolidating reforms that were already delivering value.

Under the last Government the draft relief was introduced to give pubs a much needed lifeline, cutting duty on beer from draft containers over 20 litres and reinforcing the social and economic value of the on trade. I campaigned hard for that. I was delighted when my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), as Chancellor, agreed to a differential duty for draft beer. Then the Leader of the Opposition, as Exchequer Secretary, introduced it as part of the alcohol duty review.

I know that the Minister harbours some ambitions; I hope that the subsequent elevation of predecessors who moved to support pubs through duty reform will offer him some inspiration. Reports of a potential review that could scale back the benefits of that draft beer duty rate are deeply concerning. Small producer relief, launched under the last Government and building on the success of Gordon Brown’s small breweries relief, was a significant step forward. I pay tribute to Gordon Brown for that measure, if nothing else: small breweries relief played an important part in encouraging the emergence of a thriving small brewing community, from hobbyists through to established local brewers, in every part of the country. We are seeing the long-term benefits, both economic and cultural.