Support For Pubs

Dear constituent,

Thank you for contacting me about tax on beer and pubs. I appreciate the importance of this issue, particularly with pubs having been hit so hard by COVID-19.

Pubs are a vital part of our high streets and social fabric in communities throughout the country. They also play an important role in our national economy. Indeed, before the pandemic, the sector was supporting 900,000 jobs, generating £23 billion in economic value and providing £13 billion in tax revenues. I am aware though that pubs face a range of tax pressures, including beer duty, business rates and VAT. Even before the pandemic, pubs were under severe threat, with a 15% fall in their number from 2010 to 2020.

I note Long Live the Local’s proposed tax reforms and hope the Government will give them proper consideration. I know that in response to them, the Government has so far simply stated that it “keeps all taxes under review and any changes made will be announced at the next fiscal event.”

On beer duty, last year the Government published a call for evidence for a review of alcohol duties. It says this review aims to make the current system simpler and more economically rational and will have to consider how to balance various factors, such as supporting public health, protecting tax revenues and providing a fair deal for all parts of industry. I can assure you that I will continue to monitor developments on this issue.

On business rates, I believe we should freeze rates next year to increase the threshold for small business relief, giving small and medium-sized businesses in all sectors a discount. But in the longer term, I believe we need to scrap the current system and replace it with one that is fairer and provides a level playing field for the high street businesses that do so much to enrich our lives.

A fundamental review of the business rates system was scheduled to conclude earlier this year but has been pushed back to the autumn. Given the number of jobs depending on our pubs and the threat those jobs face, I believe this review must not be delayed any longer than necessary and must lead to wholesale reform. An overhaul of business rates is long overdue and must be part of a real plan to help our hospitality industry thrive.

Thank you once again for contacting me.

Yours sincerely,

Peter Dowd MP