Thank you for your email regarding a cut in beer duty to help pubs and breweries on their road to recovery.
There is no denying that pubs and breweries have been hit particularly hard by the impact of the Coronavirus pandemic. We are very lucky to have a number of great community pubs in Islington, but we have also lost far too many in recent years owing to financial pressures, and for some, the national lockdown was the final straw.
With each local pub employing on average 10 people, with 600,000 people in the UK relying on beer and pubs for their livelihood, and with millions more people equally reliant on their local pubs to meet friends and socialise, we have a responsibility as a community and a country to respond to the pressure facing pubs, especially in light of the Coronavirus pandemic.
In his 2020 Budget, the Chancellor announced that the government would freeze duty rates on beer, spirits, wine and cider. However, a lot has changed since March. As you know, due to Coronavirus restrictions, pubs are no longer able to operate at full capacity and the new measures requiring them to close their doors by 10pm are limiting their custom even further. Pubs and breweries urgently need additional help.
On top of this, way before a pandemic was declared, the uncertainty of Brexit and trade negotiations with the EU was already worrying British brewers about the future of import and export charges for ingredients. The threat to this industry of ending the Brexit transition period without a deal on future trade remains unacceptable.
My former Labour colleague, Ruth Smeeth, was right to call attention to the disproportionate levels of taxation faced by pubs and breweries. During a debate last year, she noted that Amazon, with an annual turnover of £1.98 billion, paid just £4.5 million corporation tax last year. However, Black Sheep Brewery paid £8 million, despite its significantly lower annual turnover of £19 million.
A Labour government would review local taxation, such as business rates and council tax, to support local pubs and breweries. We had a proud record when we were last in government of keeping beer duty as low as possible, as well as introducing the small brewers duty relief scheme, which contributed directly to the boom in Britain’s craft beer and microbrewing sectors. We will maintain that record of support for pubs and brewers when next in power.
Thank you again for sharing with me your thoughts about this important issue. If you have any further points you would like to raise with me about this matter or any other, please do not hesitate to get in touch.
The Rt Hon. Emily Thornberry MP
Islington South and Finsbury