Clause 186 - Rates of alcoholic liquor duties

Part of Finance Bill – in a Public Bill Committee am 6:00 pm ar 19 Mehefin 2012.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Graeme Morrice Graeme Morrice Llafur, Livingston 6:00, 19 Mehefin 2012

I shall just read the Whip’s note.

It is a pleasure to follow my good friend and colleague, my hon. Friend the Member for Easington. I, too, like a wee bevvie, as we say in Scotland.

The amendment was tabled as a result of increasing public concern regarding the impact of alcohol duty on the price of beer and the pub industry. The British Beer and Pub Association has highlighted the fact that beer duty has increased by 42% since the beer duty escalator was introduced in 2008. It is worth noting that, when the escalator was introduced, it was against a backdrop of rising household incomes and lower inflation and VAT. Since 2008, household incomes have been falling while inflation and VAT have both risen, leading to an increase in brewing costs. As a consequence, the humble pint of beer—a staple pleasure for millions, including, I am sure, many Committee members—is fast becoming an expensive luxury. The BBPA states that UK consumers now pay 40% of EU beer tax, while consuming only 13% of the beer. That figure is astonishing.

On the industry side, brewers pay half their brewing turnover in tax, which is crippling one of Britain’s great manufacturing industries and putting thousands of jobs at risk. The BBPA has also said that, based on current Government plans, that will increase by 27% during this Parliament, despite Treasury forecasts showing that no additional revenue will be generated over the next couple of years.

Changed circumstances mean that the impact of the beer duty escalator on consumers and the industry has been far greater than originally anticipated and a careful re-examination of the policy is required. Local community pubs, and consumers who enjoy visiting them, are paying the price.

Research conducted by the Campaign for Real Ale shows that 84% of people believe that a pub is as essential to community life as a shop or post office. I have always held the view that well-managed pubs play an invaluable role in local communities, especially in rural areas, where they are often one of the only venues available for people to gather socially. They can provide a safe, sociable environment in which people can enjoy a drink responsibly and socialise with people of different ages and backgrounds.

CAMRA states that the UK already has the second highest duty on beer in the EU and suggests that that is causing untold damage to local pubs. In just six years, there has been a 30% collapse in the volume of beer sold in pubs, as more than 7,000 pubs have closed for ever. Most Committee members will be aware of community pubs that have gone to the wall, costing jobs and leading to the loss of an important hub for community activity and socialising. CAMRA fears that this worrying trend will continue, putting many more traditional beers and pubs under threat, and is calling for an end to the beer duty escalator and a long-term freeze on beer duty. Some 58,000 people have already signed an e-petition calling for the escalator to be scrapped in next year’s Budget, making it almost certain that it will reach 100,000 signatures in the near future and allow campaigners to seek a parliamentary debate.

Given the importance of the beer and pub sector to the economy, with a £28 billion turnover and around a million jobs supported, it is vital that the wider economic and social impact of the beer duty escalator is fully considered when decisions are reached. This amendment would help to inform the debate, by ensuring a full review of the wider economic impact.