Alcohol Taxation — House of Commons, 2022-07-07
Topic: Macroeconomics
Lucy Claire Leigh (Frazer) (Conservative, Centre-right): There are many laws in the EU, as the hon. Lady will know, that have dictated our laws for many years. Those are the regulations and directives that we are changing, not only in this area, but in many others. Coming back to the system we are producing, we ran a consultation from after the autumn Budget until January this year and Treasury officials have met many stakeholders from across industries and public health groups. The hon. Lady said that we need to consult more, but I can assure her that Treasury Ministers, largely the former Exchequer Secretary to the Treasury, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), who was responsible for this area, have met colleagues from across the parties. We have spoken to and visited businesses, from the smallest to the largest, welcomed representations from many of the most important trade bodies and sat down with the Australian high commissioner, all to ensure that at the Treasury we have heard all points of view on the reforms. I can assure the hon. Lady and others that we are listening I will come on to the points that hon. Members have made. We have heard from industries, businesses and colleagues about their concerns, and we will continue to listen to the feedback. The comments made in this debate will form part of that listening. We are actively thinking about how we can reduce burdens on businesses while still preserving the many benefits of the system, not least the clear and obvious public health benefits of taxing products by their alcohol strength Many hon. Members have talked about issues with keg size, including my right hon. Friend the Member for Vale of Glamorgan, my hon. Friends the Members for Meon Valley and for Dudley South (Mike Wood), and the hon. Member for St Albans (Daisy Cooper). I want to assure them that, while I cannot make any announcements today, we are listening to that point. My right hon. Friend the Member for Vale of Glamorgan, my hon. Friend the Member for Dudley South and others talked about how small producers’ relief is too complicated. I reassure them that we are determined to get rid of the cliff edge to support the growth of small brewers Other hon. Members talked about the duty charges on wine. I have spoken to the former Exchequer Secretary, who told me how she has been engaging with the sector on this very issue. The hon. Member for St Albans mentioned that she had visited the Wine Society and heard its views, and I know the Treasury is looking at ways to reduce the administrative burdens The hon. Lady also talked about fortified wines; she will know that we are reforming the duty on fortified wines to ensure that those products pay a consistent rate of duty per unit with still and sparkling wines and high-strength beers. We are increasing the duty on fortified wines to equal the duty on spirit-based liqueurs such as Baileys, because both drinks are made using spirits and we think it is right in those circumstances that they pay the same rates My hon. Friends the Members for Weston-super-Mare (John Penrose) and for Meon Valley talked about cider, as did others, and I hear what they are saying. They will know that ciders will benefit from new reduced rates for lower ABV ciders below 3.5% ABV, and as part of our new draught relief we will cut duty rates on draught fruit ciders by 20% to equalise them with beer, cutting 13p off a pint. Nobody has mentioned this today, but I would like to reiterate that we announced in the 2021 autumn Budget that we were freezing cider duty for the fourth consecutive year. The hon. Member for Gordon (Richard Thomson) talked about Scotch and other spirits. I remind him that at the Budget the Government froze spirits duty, saving 52p off a bottle of Scotch compared with what it would have been if duty had risen with inflation. Because of the decisions that we have made, spirits duty rates are at their lowest level since at least 1918. It is a really important industry for us and we have an exceptionally competitive environment for Scotch to succeed. Domestic whisky volumes have expanded year on year, including throughout the pandemic, to reach their highest levels since 2013, growing by 11% over the past two years.