Budget Resolutions — House of Commons, 2021-11-02
Topic: Macroeconomics
William David Wiggin (Conservative, Centre-right): The subject of the River Wye has already been raised by my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman). There is no advantage in my repeating all he said; suffice it to say that there is not a cigarette paper between us in our agreement on that vital subject The Budget comes at the tail end of a once-in-a-century pandemic, the sharpest financial hit in more than 300 years. Despite what others may think, our finances were in good shape before the pandemic hit. That allowed us to keep the country running, so we should be grateful to the local authorities and all those who played their part and mended the roof while the sun shone Now, as we make our way out of the pandemic, it is encouraging to see signs of our economy recovering at a great pace: record numbers are in work, job vacancies are at a record high and we have the fastest-growing economy in the G7. We should not forget that that is largely thanks to £280 billion-worth of support from the Government, the taxpayer and our Chancellor, keeping businesses afloat and helping families to weather the storm. This Budget means that we can stay in the lead, helping industries such as the hospitality sector and the hop and cider industries in my constituency The cider industry in Herefordshire is said to produce most of the cider consumed in the UK. Cider apple growing is worth only about £24 million to farming annually, yet UK cider production comprises 39% of the global market, and the industry pre-pandemic was worth about £3.1 billion to the UK economy. However, it has taken a significant hit during the pandemic Cider is now worth £2.1 billion—a decrease of 32.1%. That is why the Chancellor’s announcement about alcohol tax and duty will have a significant impact on producers based in my constituency. The 15 alcohol duty rates will now be reduced to six—a simplification that was a long time coming—and cider duty will see its biggest cut since 1923. Having always been at a 2p disadvantage to beer, cider will now finally be treated as equal The alcohol by volume of most ciders is between 4.5% and 7%, which is similar to beer, excluding the low-alcohol versions. Some 47.8% of all households, up from 45.5% last year, now regularly buy cider. I think that that is fantastic. Apparently, the average UK household takes home 33 litres each year—it must be good for them Over the past year, cider sales online saw a growth of 81.4%. Cider occasionally wins a share from beer during the summer months, going from 10.5% of market share to 12%. It is easy to see why this should have happened. I welcome the Chancellor's announcement because it will promote job stimulation in the sector. At present, just 11,500 people rely on the cider industry for employment, yet UK cider producers sell to more than 50 countries all over the world. My constituency is home to some of the finest and best-known cider manufacturers not only in the UK, but in the world, and they will truly benefit from the Chancellor’s announcements We have a burgeoning craft cider sector as well. Approximately 80% of Britain’s cider makers are small producers; the small producers relief is fantastic news to those entrepreneurial cider makers. It is my hope that the simplification will allow small producers to become more profitable and expand their market share. Currently, hundreds of producers make cider up to the 70-hectolitre limit, but produce no more because they cannot afford the tax burden of going over the threshold: as soon as they produce 7,001 litres, they have to pay the current duty on their entire quantity at the same rate as a multi- national corporation that produces 1 million hectolitres. The new changes are important; I look forward to seeing the detailed plans to support small local producers when they are released I also welcome the benefit that this Budget will have for the hop-growing industry. Just over 50 British farmers grow hops in the UK, of which about half are in my constituency. The relationship with the crop goes back centuries: the first reference to hop growing in Herefordshire was made in 1577. Herefordshire is one of only three major hop-growing regions in the UK, alongside Worcester and Kent. Over recent years, there has been an explosive rise of craft brewing that has revolutionised the British beer industry. As a result, demand for local hops has grown, and it is my hope that demand will only increase as we promote brewers and their fare As we all know, the hospitality sector took a massive hit during the pandemic. According to figures from the Office for National Statistics, consumer spending on hospitality started to increase in May 2021, but remains at less than 70% of pre-pandemic levels. It is therefore encouraging that 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022-23. That will be a huge relief for the pubs that struggled so much that they were forced to close their doors Post-covid tourism within this country is expected to grow as well. When that is teamed with the biggest cut in beer duty for 50 years, we are looking at boosting British pubs by nearly £100 million a year, which has to be a good thing. Collectively, we expect to reduce the burden of business rates in England by more than £7 billion over the next five years, and the freeze in alcohol duties for the third year in a row will translate to a tax cut worth £500 million every year for families. The duty on draught beer and cider served from containers of over 40 litres will be cut by 5%, which will encourage drinkers to return to pubs after the pain of the pandemic and give the pubs the boost that they need. However, Ministers are due to hold a consultation on the size of kegs eligible for the tax relief. Many of the craft brewers and cider makers that we are trying to boost use 20 or 30-litre kegs. Unless the consultation shows some sort of sympathy towards them, I expect that that will change fairly rapidly We must be careful not just to help the big producers, but to do the Conservative thing of encouraging the entrepreneur. However, as Nik Antona, the chairman of CAMRA—the Campaign for Real Ale—rightly said after the announcement, the Chancellor’s budget shows that "pubs are a force for good in our communities and should be supported to help them survive and compete with the likes of supermarkets." I truly believe that the Chancellor agrees with that statement, and I commend him for all he is doing for the sector This Budget was never going to be an easy one, and I have my concerns about some aspects of it, such as NHS reform along with value for taxpayers’ money. I would of course have liked to see more taxes reduced, while recognising that the armed forces who have played such a crucial role need to be increased. With such large expenditure announced for our public sector, it is only right that we expect a modicum of reform, and the way in which it spends taxpayers’ money must be scrupulously rigorous. However, we are faced with recovery from an extremely sharp economic decline, not just nationally but internationally Crucial aspects of the economy are growing and giving everyone the leg up that they deserve. I look forward to seeing how these changes continue that help for individuals and, especially, businesses in my constituency.