Contribution
I congratulate the hon. Member for Woking (Mr Forster) on bringing this important debate to Westminster Hall and uniting us behind support for beer—although his colleague the hon. Member for Wokingham (Clive Jones) slightly broke that consensus with my hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood) on a couple of points.
Beer and pub businesses support 1 million jobs across the UK and contribute £34.4 billion to the economy. In my own North West Norfolk constituency, there are more than 70 pubs and four breweries, which support 2,300 jobs and generate £53 million for the local economy. Those brewers are Brancaster, Fox, Lynn and Duration in West Acre—I strongly recommend Duration’s Turtles All the Way Down IPA. This has been a good debate with a long list of excellent-sounding pubs and breweries.
The previous Conservative Government introduced a new duty system in 2023, which has been referred to. That was the biggest reform of duties for more than 140 years and was based on the common-sense principle of applying duty based on the strength of alcohol to modernise existing duties, support businesses and meet public health objectives. New reliefs were also introduced: draught relief, which we have heard about, to cut the burden on draught products; and small producer relief. The British Beer and Pub Association, as quoted by the hon. Member for Hartlepool (Mr Brash), said that those reforms were very welcome for the beer industry, and I am sure everyone would agree with that. Conservative support for the sector went further; at autumn statement 2023, we froze alcohol duty, and the freeze was extended at the spring Budget a year ago.
By contrast, at the tax-raising autumn Budget, the Chancellor increased the headline rate of alcohol duty by inflation, although she did continue our policy with a reduction in the rates for qualifying draught products and under small producer relief. While I recognise and welcome those steps, the changes to draught relief will mean that beer duty on an average 4.5% strength pint of beer reduces from 54p to 53p—a paltry one penny saving. With the average pint now breaking the £5 barrier to mitigate new costs, many are left wondering if the Government really get the challenges facing the pub and brewing sector. One in every £3 spent in the pub goes straight to the Treasury, and beer duty rates are now up to 12 times higher than in other European nations. The Government’s fiscal approach risks squeezing the life out of those vital sectors.
A lot has been said about the role of pubs, and I also want to reflect on the role of breweries. The brewing subsector sustains 85,000 jobs and contributes £5 billion to tax revenues. Breweries are clearly fundamental to the success of pubs and the hospitality sector. More than 80% of beer sold in the UK is produced domestically in 1,800 breweries, which have strong domestic supply chains and a strong economic multiplier effect. The economic value that they generate largely stays in the UK, and the Government should support that in the policy approach that they take.
Beyond the increase in alcohol duty, which is the primary focus of this debate, we have also heard a lot about EPR and the extra costs that producers are facing. The BBPA has calculated that EPR fees and Budget costs will add more than £800 million of extra burden on to the sector. The Government’s impact assessment failed to make any distinction between sectors, so will the Minister commit to properly assessing the impact of fees on pub closures and the brewing sector? In the current climate, how can he think that those sectors can afford these huge additional costs?
All Members know from talking to pubs and breweries in their constituencies just how worried they are about increased costs. On Friday, I was at the Rose and Crown in Harpley in my constituency, which was one of my favourite pubs under its previous management and has just reopened. From talking to the new team, who have pubs across Norfolk, it is clear that the national insurance increase—in particular, almost halving the threshold at which it is paid—has been challenging and is leading to job losses across the sector.
Pubs make an important contribution to our economy and our communities. When in government, we introduced measures to protect the nation’s beer producers and hospitality venues. I pay tribute to my hon. Friend the Member for Kingswinford and South Staffordshire, who was a doughty campaigner throughout the last Parliament to achieve that. Time and again, however, I hear that choices made by this Government are placing unsustainable pressures on businesses. UKHospitality has just published figures showing that since the autumn Budget, 69,000 jobs have been lost in the hospitality sector, compared with the previous period where 18,000 jobs were added. It is little wonder that UKHospitality said that the decisions made by this Chancellor and this Government deliver a hammer blow to the sector.
Businesses are extremely concerned about what will come in the autumn Budget, given the black hole that has emerged in the Chancellor’s spending plans. Treasury Ministers keep saying that business confidence is at a record high, and they sometimes manage that without a smile on their face. But if the Minister makes his way to the Dog and Duck, he will get a reality check, and he will hear loud and clear how tough things are for pubs and brewers; how the Government’s increases in national insurance, wage costs and business rates mean a third of venues are running at a loss; and the need for the Government to change course. Otherwise, spiralling costs risk undermining the Great British institution of the pub, which is at the heart of our constituencies and communities. Rather than loading on more costs, the Government should be supporting pubs and brewers. If the Minister does that, we will all buy him a pint.