Thank you for contacting me regarding the proposal for a cut in beer duty.
There is no denying that pubs and breweries have been hit particularly hard by the impact of the 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 in our area and across the country, the pandemic has been 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 an urgent responsibility as a country to respond to the pressure facing pubs, especially in light of the Coronavirus pandemic.
You are right to point to the disproportionate levels of taxation faced by pubs and breweries. Prior to the pandemic, one of my Labour colleagues 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.
Labour had a proud record in government of keeping beer duty as low as possible, as well as introducing the small brewers relief scheme, which contributed directly to the boom in Britain’s craft beer and microbrewing sectors. We will maintain that record when next in power, as well as reviewing local taxes that hit pubs and brewers, such as business rates and council tax.
Unfortunately, however, as long as we remain in opposition, there is only so much we can do. In anticipation of the last Budget in March, we urged Rishi Sunak to pay special attention to the needs of our pubs and breweries, and fulfil his promise to do “whatever it takes” to help them through this extraordinarily difficult time.
In response, the Chancellor cancelled the planned tax increase on beer duty for the second year in a row. While this was a small help, it was a far cry from doing “whatever it takes” to support the recovery of our pubs and breweries, especially with the temporary cut to the rate of VAT on food and non-alcoholic beverages set to end at the end of September, and the 100% business rates holiday for hospitality businesses finishing in June.
The Labour Party will therefore keep up the pressure on the government to give proper support to this vital sector, and your continued campaigning for action is greatly welcome in that regard.
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
Shadow Secretary of State for International Trade