Chair of the All Party Parliamentary Save the Pub Group, Greg Mulholland MP, has today during the debate on the beer duty escalator, called on the Government to scrap the unfair policy at the 2013 budget.
The debate, secured by Greg as Chair of the Parliamentary Save the Pub Group and Parliamentary Beer Group Chair, Andrew Griffiths,was attended by a large number of MPs from across the House who took the opportunity to raise with the Treasury, their concerns with the beer duty escalator.
The beer duty escalator is an increase in tax on beer by 2% above the rate of inflation introduced in 2008 and in place until 2014/15. As a result, tax on beer has gone up by over 40% since 2008.
The beer duty escalator has proven damaging to brewers across the country and led to increases in beer prices. These price increases are absorbed by the supermarkets, however, pubs are simply unable to do this 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.
Mulholland also urged the Treasury to look at further ways to recognise the value of pubs through the tax system. He cited and Institute of Public Policy Research report which recommended 50% business rate relief for well run community pubs that act as ‘centres of community’. He also raised the issue of providing further relief for real ale by standardising and increasing the allowance on undrinkable sediment present in each cask.
He also called on the Minister to insist on a guarantee from the big pub owning companies that if, as we hope, the beer duty escalator is scrapped, that they pass this on and lower prices to their tenants so that this extra revenue is passed on to licensees and to pub customers and not simply into the pockets of the large pub companies to service their unsustainable debt levels.
Greg also raised the urgent need for greater protection for pubs in planning law, with profitable pubs being turned into supermarkets despite community opposition.
“Following all the hard work done to get the e-petition up to 100,000 signatures I was delighted with Andrew Griffiths MP to secure the opportunity to debate the beer duty escalator on the floor of the House of Commons.
“The beer duty escalator is unfair to brewers and where as supermarkets can absorb the increase in the price of beer, pubs simply cannot and this can further increase the difference between a can in the supermarket and a pint in the pub, which is a controlled and sociable environment. So this policy flies in the face of Government calls to encourage responsible drinking.
“It is also a policy is that simply doesn’t add up, it doesn’t raise the money predicted by the Treasury Since 2004, beer duty rates have increased by 60%, and beer duty revenue by just 10 per cent (a significant fall in real terms) while beer sales have fallen by 25%.
“We should, however, be clear that the beer duty escalator is not the only problem facing pubs. Tennants and licensees in pubs owned by large pub companies are often subject to a ‘pubco escalator’ with the double whammy to their tenants of ever increasing and unreasonable beer prices charged alongside inflated rent.
“So the Minister must get a guarantee from all the large pub owning companies that if, as we hope, the beer duty escalator is scrapped, that they pass this on and lower prices to their tenants so that this extra revenue is passed on to licensees and to pub customers and not simply into the pockets of the large pub companies to service their unsustainable debt levels.
“I also hope the Treasury will look at further positive tax measures that can recognise the important place pubs play in communities and I hope he takes that seriously.
“I also called upon the new Community Pubs Minister to close the loopholes in the planning system that allows pubs to be turned into supermarkets without planning permission, which means that regardless of duty or anything else, many viable pubs are falling victim to ‘predatory purchasing’ and valued community locals are being turned into Tesco Metros and developed against local wishes. This can and must be stopped.
“Today the voice of Parliament was heard loud and clear. Whilst we haven’t had a commitment to a formal review, there can be no doubting the view of the House on this issue and I hope that the Minister will indeed conduct a review. It was very encouraging to see so many Members from across the House contributing positively to the debate today with not a single one speaking against the motion and I look forward to continuing to work with all those who have worked so hard to get this issue on the agenda.
“The beer duty escalator makes sense neither economically nor socially, it is unfair, unsustainable and unjustifiable and we will continue to campaign for it to be scrapped at the next budget”
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