Pubs and Brewers
I appreciate the importance of this issue, with pubs having been hit so hard, first by COVID-19 and now by the energy crisis.
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, they were under severe threat, with a 15% fall in their number from 2010 to 2020.
I note Long Live the Local and the Campaign for Real Ale’s proposed tax reforms. As you will know, the Government has frozen beer duty, as well as proposing reforms to alcohol duties from 2023 that would reduce rates on draught beer, as well as some lower strength beers. I welcome these reforms but appreciate concerns that the draught duty discount as put forward risks excluding small brewers and small community pubs, which often use 20-litre or 30-litre containers. I believe the Government needs to be clear about how many small brewers will benefit with the threshold set at different container sizes.
On VAT, however, it has said it has no plans to reintroduce a reduced rate for tourism and hospitality. I can assure you that I will monitor developments on these issues.
On business rates, meanwhile, the Government has rejected changes to the tax or the basis of valuation. I believe it has missed an opportunity for fundamental reform – in the long term, we need to scrap the current system and replace it with one that provides a level playing field and takes more of the burden off of small high street businesses such as pubs.
More immediately, I am concerned that treasured community pubs risk going to the wall because the Government has failed to get to grips with the energy crisis. For some time now, I have supported calls for a plan that would bring down costs for small businesses by cutting their business rates, saving high street firms thousands and paid for by fairly taxing the most profitable global tech companies. Yet throughout this time the Government has delayed taking action. And while it has now announced an energy support package, average energy prices are still rising significantly and the scheme is only in place until March. Our pubs cannot afford this uncertainty. I can therefore assure you that I will continue to support efforts to press the Government on this issue.