Clause 2 - Rate of duty on beer
Finance Bill
9:30 am
Mr Jonathan Djanogly (Huntingdon, Conservative)
It is important to say something about real ale. The industry is not happy with the proposed rise and has hit out against the penny increase. Mike Benner, head of campaigns and communications for the big consumer group, the Campaign for Real Ale, stated:
''We understand that the Government needs to raise extra cash in this Budget, but increasing beer duty is a flawed strategy. As people only have so much cash to spend in pubs and bars, increasing duty reduces average consumption which in turn reduces revenues from beer duty. This increase is a blow for consumers after freezes in the last two budgets indicated a more sensible approach from the Government.''
That ties in with what my hon. Friend the Member for Billericay said. It is all very well to crack down on smuggling—indeed, we must do so—but at the same time we must put the price of beer in this country in the context of the price in the rest of Europe. Most people do not have to indulge in smuggling. They can legally go to the continent and purchase alcohol at a rate that is vastly reduced in comparison with rates in this country. That is why I fully support the proposal of my hon. Friend the Member for Eddisbury, who said that it would be helpful if the Government were to provide comparative figures for other European countries so that we could see what we were talking about.
Yesterday, on the Floor of the House, we discussed the duty on Scotch whisky. As part of that debate, comparisons were made with the duty on beer and wine. I remember the Economic Secretary saying that he was happy that the duty had been kept constant for a number of years and that it would have been bad for
whisky if there had been increases over those same years. However, he did not go on to give a rationale for the Government's strategy of freezing duty on whisky, other than to imply that that had been done on a year-by-year assessment basis.
Comments made yesterday are relevant to the debate. It would help the industry if some sort of strategy were put in place, so that it could be debated as an issue and put in an overall context. Has the Government's policy over recent years been to equalise the duty on whisky vis-à-vis the duty on beer and wine? The Economic Secretary never addressed that in the debate yesterday, so it would be helpful if he addressed it today.