Giles Watling, MP for Clacton, has raised the issue of differential rates of beer duty in Parliament, in order to protect local pubs after the UK leaves the European Union.
In a debate on 25th June, Giles raised a proposal for differential rates of beer duty, which was first brought to his attention by local CAMRA members. This proposal would vary rates of beer duty paid on-trade sales, in pubs, from those on off-trade sales in retailers. This could be used to benefit pubs over supermarkets.
The Government has already acted to reduce the burden on our pubs, but even after previous reductions in beer duty, the UK still has one of the highest rates in Europe: paying 40% of all beer duty in the EU, whilst only consuming 12% of the beer. Consequently, 56% of drinkers now believe that the price of a pint of beer in a pub is unaffordable, according to the Campaign for Real Ale (CAMRA). Evidence suggests that this had led to many people choosing to buy cheaper beer in supermarkets rather than in a pub, where average prices can be much higher. Giles believes that this underlying disparity in cost needs to be addressed to skew the odds back in favour of the local pub.
Speaking in the debate, Giles said:
“Previous across-the-board cuts in beer duty, although welcome have helped supermarkets to continue to undermine on-trade sales, while failing to slow the rate of pub closures. Despite the Government’s valiant efforts, therefore, the important contributions that our pubs make to the economy and to community life by providing a place to socialise and encouraging responsible drinking remain at risk. Most concerningly, analysis shows that it is small independent pubs that are disappearing as the big pub chains consolidate their businesses around larger bars, usually in town centres. Eventually, that will allow those big pub chains to monopolise the on-trade marketplace. That will give them a stranglehold over pricing and is unlikely to result in a cheaper pint for the consumer.
“Moreover, the closure of any pub, especially a small community asset, endangers work on loneliness and social cohesion. Researchers have found that people who have a local pub are happier, have more friends and feel more engaged with their local communities, but closures are depriving some people of those benefits. That can be particularly acute in rural areas. The pub is a famous and traditional part of the British way of life. It is an essential part of the community. It deals with loneliness and is a form of social care…”
“….Pubs are also positive for our high streets. They attract visitors, so closures are counterproductive to the Government’s efforts to revitalise our urban centres. Let us not forget the general economic impact of the beer and pub industries, which contribute £23 billion to GDP every year and support more than 900,000 jobs. Crucially, 44% of those jobs are held by 16 to 24-year-olds…
“…Today, the number of hospital admissions related to alcohol remains high at one million annually, and that places a strain on our precious resources. Most worryingly, the number of admissions has risen as a pint has become more expensive. Even if there is not a direct correlation, 73% of publicans think that increasing the price of off-trade alcohol is crucial to tackling alcohol problems.
“We can do that with a differential rate of beer duty that skews the odds back in our pubs’ favour by cutting the on-trade beer duty rate to benefit those sales over off-trade sales.”