Small Breweries Relief

Part of the debate – in the House of Commons at 9:30 pm on 9th November 2020.

Alert me about debates like this

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary 9:30 pm, 9th November 2020

I take the point the right hon. Lady makes, but the Treasury is not doing this to squeeze small brewers. We are not making any money from it either. The reason we are doing it is that industry has asked us to do it, and not the multinationals or large brewers. There is a dispute that we are settling, and we believe that the cash basis will improve things.

The right hon. Lady is right to mention uncertainty. I think the answer is for us to move at pace to give business certainty, not to postpone the uncertainty about what we will do on this relief even further into the future.

A point was made about mergers. As hon. Members are aware, when two brewers merge, their entitlement to small breweries relief changes. Many brewers complain that this distorts business activity, as mergers become unviable. My predecessor in this role, my hon. Friend Andrew Jones, has given examples of businesses that have not been able to grow. We need to look at the industry in the round, not just at those who fit a particular demographic.

I reiterate that we listened to many small breweries. We listened to a wide range of breweries and reviewed copious evidence related to SBR. I cannot tell Members how many pages and pages we went through in the consultation that just happened, and there is even more consultation coming. We met the Society of Independent Brewers, the Small Brewers Duty Reform Coalition and the British Beer and Pub Association about this issue, and officials and I continue to meet all those stakeholders. The Treasury ran a survey in 2019 that received 335 responses, as I mentioned. I am afraid that the industry is simply divided on this issue. The idea that all small brewers have the same perception of the relief is misplaced.

My hon. Friend Darren Henry spoke about small brewers falling through the cracks, as did my right hon. Friend Mrs Miller and others. We do recognise that. Small brewers are able to benefit from our unprecedented coronavirus response, which includes the job retention scheme, VAT deferral and bounce back loans, as hon. Members will have heard many times before. We have also acted to allow brewers whose beer was spoiled due to pub closures to reclaim excise duty more easily. However, brewers have been able to sell alcohol throughout this period, and thanks to schemes such as CAMRA’s Pulling Together campaign, more than 800 breweries have moved to offer online sales for collection or delivery for the first time. The Treasury is keeping the support it offers to businesses under review as the pandemic progresses.