Clause 9
Finance Bill
5:45 pm
Jeremy Browne (Shadow Chief Secretary To the Treasury, Treasury; Taunton, Liberal Democrat)
I apologise if the Minister’s flippant attitude towards this issue did not amuse me as much as it should have done. I only wanted to touch on that issue. Let me declare a few more interests. There are a number of small beer and cider brewers in my constituency who provide a significant source of employment. Dozens of people in my constituency and thousands of people across the country work in small breweries. Beer sales have gone down in Britain in recent years: much of the slack in alcohol consumption has been taken up by wine drinking, as was mentioned earlier in the discussion about social changes. However, nearly all wine is imported, whereas quite of lot of beer is brewed in this country.
There is an impact on brewers and employment not only in areas like mine but right across the country, as a result of bringing in measures that could suppress demand for beer and other alcoholic products. I was simply asking for an assessment to be made of that impact and whether it was a trade-off with which the Treasury was happy. The Minister said that those matters were kept under constant review, but that simply is not the case. If it were, the Chancellor would not have announced above-inflation increases as an escalator for the next three years. Even if the review finds an adverse effect on businesses and employment, the Government are committed to above-inflation increases, so the matter is not under constant review at all. It will not be reviewed during the lifetime of this Parliament. Not until after the next general election can we step back in the Treasury and see whether damage has been done to this sector.
Damage is potentially being done to employment. It is also being done to real communities. The hon. Member for Cities of London and Westminster made a good point about changing social and drinking patterns. I tried to make that point in my earlier contributions, and I will try to make a point now that does not contradict it but expands upon it. The social heart of many villages and small towns in areas like my constituency is removed when their post office, their shop or their village pub is closed. It is not the job of Government to prop up businesses that are unable to attract customers—I am not saying that—but neither is it the job of Government, when those businesses are teetering on the brink, to make it harder for them to remain viable. That is undoubtedly the impact of this proposal.
I may have had another humourless moment, but the Minister went on to say that pub landlords routinely increase their beer prices by more than the taxes that the Treasury have imposed, and that they use the Treasury as an excuse for a wider set of price rises. I assume that her point was that they are trying to make their businesses more profitable while blaming the Government for raising the prices that they charge their customers. The people who run many of these businesses work extremely long hours, and they probably do so for low profitability. If one added up the number of hours and worked out the profitability, many of them would be working for less than the minimum wage on an hourly basis.
The idea that these people are not trying to squeeze out every penny of competitive advantage to try to attract new custom, and have the luxury of being able to afford to charge their customers far more because those customers are just rolling through the door and are completely insensitive to price increases, is delusional. If any of the Treasury Ministers spent a day with a rural publican who is struggling to make ends meet they would come back to this House less likely to believe that they are artificially inflating their prices.
I finish with an observation made by the then Treasury Minister, the hon. Member for Wentworth, in Committee last year:
“the general case for using taxation as a means of regulating consumption has not been made. It is not best suited to this area of policy.”——[Official Report, Finance Public Bill Committee, 8 May 2007; c. 36.]
My view—and I maintain it regardless of the scorn of the Exchequer Secretary or anybody else—is that it is simply disingenuous to claim that the backdrop for the increases in duty on alcohol is not wider public concern about excessive drinking in some sections of the population, about binge drinking, about people being sick in town centres and about increased rates of liver disease. That is the political and social backdrop against which the Budget took place, and in the minds of millions of our fellow citizens, the changes have been put through because in some way they go towards addressing a wider social problem about which people are genuinely concerned. People who run pubs and small breweries see themselves as victims of a Government who are able to bring in above-inflation increases year after year, despite any assessment made by the Treasury, on the back of a perfectly legitimate wider social concern.