Thank you for contacting me about tax on beer and pubs. I appreciate the importance of this issue, with pubs having been hit so hard, first by COVID-19 and now by the energy crisis.
Pubs are a vital part of our high streets and social fabric in communities throughout the country. They also play an important role in our national economy. Indeed, before the pandemic, the sector was supporting 900,000 jobs, generating £23 billion in economic value and providing £13 billion in tax revenues. I am aware though that pubs face a range of tax pressures, including beer duty, business rates and VAT. 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. As you will know, the Government has frozen beer duty, as well as proposing reforms to alcohol duties from 2023 that would reduce rates on draught beer, as well as some lower strength beers. However, the Government has said it has no plans to reintroduce a reduced VAT rate for tourism and hospitality. I can assure you that I will monitor developments on these issues.
On business rates, meanwhile, 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.
More immediately, I am concerned that treasured community pubs risk going to the wall because the Government has failed to get to grips with the energy crisis. For some time now, I have supported calls for a plan that would bring down costs for small businesses by cutting their business rates – saving high street firms thousands – paid for by fairly taxing the most profitable global tech companies. Yet throughout this time the Government has delayed taking action, and while it has now announced an energy support package, it has yet to provide details on this and the scheme may not be in place before November.
Our pubs cannot afford this hold-up. I can therefore assure you that I will continue to support efforts to press the Government on this issue.
Thank you once again for contacting me.
Yours sincerely,
Barry Gardiner
Member of Parliament for Brent North