Thank you to all those who contacted me about tax on beer and pubs.
Pubs are a vital part of our high streets and social fabric in communities throughout the country, and play an important role in our national economy. Yet they have been hit hard, first by COVID-19 and now by the energy and economic crises. 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’s proposed tax reforms, which a number of constituents have raised with me. On beer duty, the Government has proposed reforms to alcohol duties from 1 August that will reduce rates on draught beer, as well as some lower strength beers. It has also reinstated a planned freeze in alcohol duty, until new rates are introduced in August. It had previously announced this freeze in September but cancelled it in October.
On VAT, the Government has said it has no plans to reintroduce a reduced rate for hospitality.
On business rates, 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. I have also supported calls for a cut to business rates for small firms, paid for by fairly taxing the most profitable global tech companies.
More widely, I am concerned that treasured community pubs risk going to the wall because the Government is failing to provide the certainty that businesses and their employees need to plan for the future. Its approach to alcohol duty, for example, has seen indecision, U-turns and delays; while on energy bills, it forced businesses to go through the vital Christmas period without knowing what the new energy support scheme in April would look like. And when the announcement of the scheme finally came on 9 January, it was, I believe, simply a sticking plaster rather than the long-term plan we need to deliver lasting energy security and lower bills.
