Beer Duty — House of Commons, 2015-02-05
Topic: Macroeconomics
Priti Sushil Patel (Conservative, Centre-right): Of course, the answer is yes to the delegation. My hon. Friend is right that the wine industry makes an enormous economic contribution. Earlier, he referred to English wines. I speak proudly as the Member of Parliament for Witham as I, too, have a good vineyard in my constituency. The wine sector is to be supported and commended as well. I will take him up on his offer; he is very welcome to come and meet me at the Treasury As my hon. Friend the Member for Burton pointed out, the previous Government’s beer duty escalator hit the industry hard. It led to pub closures and cost people their jobs. Of course, we have made changes to the escalator. In recognition of what happened in the past, we went on to cut tax on a typical pint of beer by one penny at Budget 2013 and another penny at Budget 2014. I am delighted that he celebrates the fact that the duty on a typical pint of beer is now 8p lower than under the previous Government’s plan. According to the British Beer and Pub Association, the jobs of 16,000 people have been secured by our duty cuts, and for them the duty cuts have been fundamental to their livelihoods. The duty cuts have also boosted confidence in the brewing and pub sector and, importantly, they have led to greater investment and greater economic security when it comes to jobs Research for the British Beer and Pub Association estimates that an additional 186 million pints will be sold in the on-trade this year as a result of our beer duty cuts. To meet that increase, it estimates that there has been a 12% rise in investment—in monetary terms, an additional £44 million—in the sector in the last year directly as a result of the cut in duty. According to a recent survey, 86% of its members are planning to increase their investment in the UK. That strengthens our economic case, and shows that we are serious about supporting the pub sector As my hon. Friend said, nearly two thirds of all the alcohol sold in pubs is beer, but other drinks are important to pubs. To ensure that help is extended to pubs that have diversified away from beer, at Budget 2014 we froze duties on spirits and ordinary cider. Of course, we ended the escalator on wine as well; I am somewhat familiar with the campaign in favour of that Pubs are benefiting from the wider changes that the Government have made to support business. Three quarters of pubs are benefiting from a £1,000 reduction in their business rates this year. The reduction will rise to £1,500 next year. We have extended the doubling of small business rate relief to April 2016, which, as my hon. Friend knows, will particularly help the eight out of 10 pubs run as individual small businesses. Pubs will benefit from our national insurance changes. The £2,000 employment allowance has reduced employer national insurance contributions for all businesses. Pubs will also benefit from the reduction in employer NICs for young people, which is particularly important because 46% of the people employed in pubs are aged between 18 and 24. We have introduced regulatory changes to make it easier for pubs to play live music, and to allow beer and wine to be served in glasses of different sizes As I am sure my hon. Friend will know, there is no such thing as a typical pub. There are as many different types of pub as there are types of customer, so pubs should have the flexibility to meet customers’ needs. It is fair to say that customers want reasonably priced drinks, naturally, and I am glad to say that our duty cuts are translating directly into more beer for your buck. Beer prices in the on-trade are rising at their lowest rate for more than 25 years: 96% of British Beer and Pub Association members have said that they plan to reduce or freeze their prices as a result of our policies. That is fantastic news for the 32 million people in the UK who drink beer each year; incidentally, that is more than the number of people who voted in the last general election Our customers want choice. It is great news that more than three quarters of respondents to the British Beer and Pub Association survey intend to launch new products directly as a result of the cut in beer duty. Small brewers relief has reduced the beer duty paid by micro-brewers by up to a half. That has encouraged new micro-breweries to be set up and to expand. There are now 1,000 more breweries in the UK than in the year before small brewers relief was introduced I am particularly interested in how we can do more to help those industries, because there are many associated benefits from having more thriving breweries, not just in exports, but in the tourism offer, as my hon. Friend has said.