After much hard work by CAMRA & others, the e-petition on the ‘beer duty escalator’ reached 100,000 signatures last month. Now, as Chair of the Parliamentary Save the Pub Group, with Andrew Griffiths MP, the Chair of the Parliamentary Beer Group, we have secured a debate on the floor of the House to discuss this.
Introduced by Labour in 2008 and disappointingly left in place by the Coalition, since its introduction beer taxes have risen by over 42% and around £1 out of the price of every pint is taken by the Exchequer in duty and VAT. The beer duty escalator places an increase in tax on beer by 2% above the rate of inflation.
This is an unnecessary tax on brewing, a major national industry and on beer, our great national drink. There is also a knock-on effect for our national institution, the great British pub. Whereas the huge supermarkets can absorb these increase in the price of beer, our valued community pubs simply cannot, which can further increase the difference between a can in the supermarket and a pint in the pub and figures clearly show that people are now being put off by the price of beer in some pubs. This leads to consumers choosing to drink outside of the sociable and controlled drinking environment of the pub, which flies in the face of successive Governments’ aims to tackle the problems associated with very low cost booze in supermarkets.
It is not only a tax on beer and beer drinkers, it also a tax that simply doesn’t make sense. It fails to raise the money predicted by the Treasury. In fact, since 2004, beer duty rates have increased by 60%, and beer duty revenue by just 10 per cent. That is a significant fall in real terms.
Of course this is not the only problem facing pubs, especially for tied pubs owned big pub companies, as they are more affected by their companies own escalator, which has seen them hit with a double whammy of above market rents and extortionate beer prices and it is high time that Government also tackled this scandal. Interestingly, the pubcos and some breweries have used duty rises as an excuse to increase prices to their own licensees yet further, so at the same time as wanting a positive announcement from Ministers, we also need a guarantee that pub owning companies will drop the price of beer to licensees, or any change in duty would not actually assist these licensees or give consumers a cheaper pint!
However for all pubs and for beer drinkers everywhere, we do need a recognition now that the beer duty escalator is unfair, unsustainable and unjustifiable. I hope the debate today will lead to a long overdue review by the Treasury who will agree with the many MPs speaking and over 100,000 people on the petition, that it is time to be fair to beer and stop this escalator in next year’s budget.
Chair, All Party Parliamentary Save the Pub Group
Member of Parliament for Leeds North West