MPs call for tax cuts to save their local pubs

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Media captionWatling: “The heart was torn out of the community”

MPs are calling on the government to reduce the tax burden on pubs and breweries in next month’s Budget.

In a packed debate in Westminster Hall, politicians from all sides celebrated the boost the businesses gave to their local communities.

But they said the duty put on beer and high business rates for local pubs were causing many to go out of business.

The government said alcohol taxes had already been cut in real terms due to a series of beer duty freezes.

Pubs have been in decline in the UK for some time, with 6,000 lost since 2010, but there are tentative signs of recovery.

The first increase for a decade in the number of pubs was recorded at the end of 2019 – a net gain of 320.

Opening the debate, Tory MP Mike Wood said the pub and beer industries were “the greatest success stories of the past 20 years” in UK business, with almost 900,000 jobs depending on them.

But he criticised the system of business rates, saying it was a “basic fairness issue” when pubs were responsible for 2.8% of all rate revenues collected – despite only accounting for 0.5% of rate-paying businesses.

Mr Wood also said beer duty in the UK “remains much too high” – despite government freezes and cuts since 2013.

To shouts of “shame”, he said: “If you bought a pint in each of the other [main] beer-producing countries – a pint in Germany, a pint in the Netherlands, one in Spain, one in Belgium and one in Poland – you would still have paid less duty on those fives pints than you would have on just a single pint bought in Britain.”

‘Common sense’

Other MPs joined in with stories of pubs and breweries in their constituencies, raising the concerns they have.

Labour MP Lilian Greenwood praised The Plough in Radford – in her Nottingham South constituency – saying it was a “nucleus for the local community”.

But she said the local Nottingham Brewery, which uses the pub as a tap room, “worries that if action isn’t taken on beer duty… the price of a couple of pints in the pub simply won’t be able to compete with the supermarkets much longer”.

The SNP’s Lisa Cameron called for “common sense” when deciding business rates for pubs, saying the Glassford Inn in her constituency of East Kilbride, Strathaven and Lesmahagow was under threat of closure.

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Tory MP Giles Watling reminisced about a “beautiful pub” called The Crown, near Stratford-on-Avon, where he had stayed 30 years ago during his previous career as an actor.

“I went back after 20 years or so… to the same village. The pub had closed and been developed into housing. I now found this place where people were no longer talking to each other. The heart had been torn out of the community. This village had fundamentally died.”

Labour’s Bill Esterson raised problems around small brewery tax relief, citing the Neptune brewery in his Sefton Central constituency.

Under current rules, if a business produces less than 5,000 hectolitres of beer, it pays 50% of full excise duty – but it must pay the full rate if it makes a drop more.

“There is a very strong case for pressure to be put on the Treasury to change those rules and enable those brilliant manufacturers and employers to grow as they wish to,” said the MP.

Duty freeze

The SNP’s Stephen Flynn warned any reform had to take into account issues with drinking, saying around 22 individuals die every week in Scotland due to alcohol abuse.

He added: “That is a shocking figure that none of us can be happy about, and of course in Scotland we’ve seen action on that through the introduction of minimum unit pricing which we expect will save 392 lives over just five years.

“So when we look at taxation, and we certainly support the reform of beer excise duty, when we look at taxation we need to do so with a holistic view in terms of public health.”

Treasury minister Simon Clarke, responding for the government, praised the “clear consensus” among MPs, about the “the centrality of pubs and beer industry and solutions that exist to make sure we help the industry to thrive”.

But, he said a cut in alcohol duties would would represent a significant loss in revenues for the Exchequer.

“The effective inflation means that in real terms, beer duty is being cut every time we have frozen [it] over the course of the last several years,” added the minister.

“Even in nominal terms, beer duty is now lower than it was in 2012. But not withstanding that, we continue to review all taxes.”