Rates of duty on cider, wine and made-wine

Finance (No. 3) Bill – in a Public Bill Committee at 3:30 pm on 4th December 2018.

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Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury 3:30 pm, 4th December 2018

I beg to move amendment 96, in clause 53, page 34, line 14, at end insert—

‘(5) The Chancellor of the Exchequer must review the revenue effects of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within six months of the passing of this Act.”

This amendment would require the Chancellor of the Exchequer to review the revenue impact of the revised rates on cider and wine.

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

With this it will be convenient to discuss the following:

Amendment 103, in clause 53, page 34, line 14, at end insert—

‘(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”

This amendment would require the Chancellor of the Exchequer to review the impact of the revised rates on cider and wine on public health.

Clause stand part.

Amendment 97, in clause 54, page 36, line 12, at end insert—

‘(5) The Chancellor of the Exchequer must review the effect on the cider industry of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within six months of the passing of this Act.”

This amendment would require the Chancellor of the Exchequer to review the impact of Clause 54 on the cider industry.

Amendment 98, in clause 54, page 36, line 12, at end insert—

‘(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”

This amendment would require the Chancellor of the Exchequer to review the impact of Clause 54 on public health.

Amendment 99, in clause 54, page 36, line 12, at end insert—

‘(5) The Chancellor of the Exchequer must review the expected effects in each part of the United Kingdom and each region of England of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.

(6) In this section—

“part of the United Kingdom” means

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

“regions of England” has the same meaning as that used by the Office for National Statistics.”

This amendment would require the Chancellor of the Exchequer to review the impact of Clause 54 on different parts of the United Kingdom and regions of England.

Clause stand part.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

I am delighted to see you in the Chair, Ms Dorries. Clause 53 provides for an increase in line with inflation based on the retail prices index in the rates of excise duty charged on all wine and made-wine with a strength at or below 22% alcohol by volume—ABV—and sparkling cider and perry exceeding 5.5% ABV but less than 8.5% ABV. The changes will come into effect on and after 1 February 2019. As we approach Christmas, we felt it was important to scrutinise this measure closely: poring over the matter, one might say. The Government have ensured that enjoying a nice glass of rouge by the fireside over a game of charades—they know a lot about charades—will cost a little bit more. Never fear though, we have tabled a number of amendments to clause 53 which I will address in turn.

It is important to note the context of the rates. Duties on alcoholic drinks are forecast to raise £11.5 billion this year, split between beer and cider at £3.7 billion; wine duties, £4.3 billion; and spirit duties, £3.5 billion. The House of Commons Library provides us with a potted history of recent developments on the matter of excise duty, an area of strong interest to the great British public.

In his spring statement—the Budget—the Chancellor announced that excise duties for alcohol would be increased in line with inflation with effect from 13 March. Provision to set duty rates was made by the Finance Act 2017 and introduced before the general election of happy memory. In addition, the Government launched a consultation on options for reform, to ensure that duty rates better corresponded to alcoholic strength, specifically a new duty rate band to target cheap, high-strength white ciders, and a new lower-strength still wine band to encourage the production and consumption of lower-strength wines.

In the autumn Budget, the Chancellor confirmed that the Government would introduce a higher-rate duty on white ciders from 2019, while duty rates on alcohol would be frozen. Freezing duties is estimated to cost between £225 million and £240 million a year from 2018-19, with provision to set the new duty rate band on white cider included in the Finance Bill introduced after the autumn, “later this year”, as quoted.

That new provision for white cider is presumably contained in clause 54, although we have some queries, which I will come on to. I would first like to note the Government’s use of RPI in this instance. It would appear that the Government apply different inflationary indices to policies, depending on which would provide them with either the most income or with the least expenditure.

There is a question of transparency. We have seen that with students forced to take loans indexed using RPI, saddling them with significant debt. I suspect that makes the loan book more attractive. Meanwhile, RPI was scrapped in favour of the lower consumer prices index for the indexing of public sector pensions, meaning our public sector workers are £12,000 worse off when they retire.

Will the Minister set out exactly why RPI was chosen as the appropriate index in this instance? The Office for National Statistics recently described RPI as “a very poor measure”, yet the Government still apply it to all revenue-raising policies, which is strange. Perhaps the Government will add a cross-departmental review of inflationary indexation to the very long list of reviews that make up much of their domestic policy agenda. No wonder they do not want to take any of our reviews; I suspect they have enough of their own to be getting on with.

For now, we should fully imbibe the implications of amendment 96 and make a sober judgment on whether the Government have taken the correct approach to this issue. The amendment would require the Chancellor of the Exchequer to review the revenue impact of the raised rates on cider and wine. I have looked closely at the policy papers for the Bill and, once again, could find no indication of the revenue that the Government hope to raise from the RPI-indexed inflationary increase. Perhaps the Financial Secretary would inform me about that; he might have a little bit more divine inspiration, as I move on. It could be that the Government are worried about how the press might treat such a figure. Again, it is a matter of transparency. We have been forced to raise the issue numerous times in our debates on the Bill; there is a total lack of information [Interruption.] I am not that boring, am I? Give me a break. It is okay; it is better than the barracking I usually get.

I have referred to the “Better Budgets” report from the Institute for Government and the Chartered Institute of Taxation, which makes clear the need for more information provided in good time. Once again, we are being asked to spend hours and hours in Committee scrutinising the barest sets of facts, with no hope of meaningful amendment. That is why we have tabled an amendment calling for a review, making a wholly uncontroversial request for costings of the higher duties that have been introduced. Sadly, the Government no longer seem to be capable of providing that basic information, so I ask again: will the Minister provide us with costings for this measure, or commit to our review?

I will refer, if I may, to amendment 103, which I think we will debate in due course. That amendment, tabled by the Scottish National party, would

“require the Chancellor of the Exchequer to review the impact of the revised rates on cider and wine on public health.”

That is a very important matter, and we would support it; we have tabled a similar amendment. In December 2016, Public Health England published a report on the public health effects of alcohol consumption in the United Kingdom. That study found that

“Alcohol is now more affordable and people are drinking more than they did in the past. Between 1980 and 2008, there was a 42% increase in the sale of alcohol. Despite recent declines in sales, as a nation we are still drinking too much, with over 1 million hospital admissions relating to alcohol annually.

The economic burden of health, social and economic alcohol-related harm is substantial, with estimates placing the annual cost to be between 1.3% and 2.7% of annual GDP. Alcohol related deaths affect predominantly young and middle aged people; as a result alcohol is a leading cause of years of working life lost”

in this country. Professor Kevin Fenton, National Director for Health and Wellbeing at Public Health England, has said:

“The harm alcohol causes is much wider than just on the individual drinker. Excessive alcohol consumption can harm children, wreck families, impact on workplace colleagues and can be a burden and drain on the NHS and economy. It hits poor communities the hardest.”

In fact, my hon. Friend the Member for Sefton Central (Bill Esterson) has on many occasions raised the issue of the damaging and tragic effects of alcohol on children in the womb through foetal alcohol syndrome. The report goes on to say:

“Since 2008, there has been a drop in total alcohol consumption but there has not been a corresponding drop in the level of related harms. The evidence review makes clear that alcohol-harm disproportionately affects the poorest communities, even though on average they drink no more than more affluent groups.”

Other findings suggest that

“most adults in England drink alcohol—more than 10 million people are drinking at levels that increase the risk of harming their health;5% of the heaviest drinkers account for one third of all alcohol consumed; alcohol is the leading cause of death among 15 to 49 year olds and heavy alcohol use has been identified as a cause of more than 200 health conditions; alcohol caused more years of life lost to the workforce than from the 10 most common cancers combined—in 2015 there were 167,000 years of working life lost; the evidence strongly supports a range of policies that are effective at reducing harm to public health while at the same time reducing health inequalities—reducing the affordability of alcohol is the cost effective way of reducing alcohol harm”.

That evidence has to be considered in the context of the Government’s long-standing policy of alcohol duty cuts and freezes. The House of Commons Library describes that in some detail, which I will not go into, but it is well worth having a look at the report. Those cuts, it is worth noting, come at some expense during a time of austerity, and we cannot ignore the fact that they could further contribute to the concerning picture set out in the report by Public Health England. The Economic Secretary indicated that there was a requirement for evidence, but the evidence in this regard is resounding: a public health approach to alcohol duties will not only raise revenue for the Exchequer, but will reduce the harm caused by alcohol in our society.

Photo of Bambos Charalambous Bambos Charalambous Labour, Enfield, Southgate

My hon. Friend is making an excellent and, shall I say, spirited speech. Does he agree that the Government have totally ignored the health effects of alcohol consumption in the way they have implemented alcohol duties?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

It leads me to believe that the Government have not paid enough attention. That is why we want to have a look at it in the round and why we want a review. Let us see the evidence. If the evidence indicates my hon. Friend’s contention as I think it will, we would need to do something.

Unfortunately, despite the move to begin to increase duties on wine and cider as set out in clauses 53 and 54, it seems that the Government’s policy on wider alcohol duties reflects continuation rather than a break with the last eight years. Will the Minister confirm that it remains the Government’s policy to increase only those alcohol duties included in the clause and to freeze all those not included? That being the case, does it not seem that the attempt in clause 54 to increase the price of mid-strength cider is a mere sticking plaster on the Government’s wider policy of ignoring the harm to the public’s health caused by cheap alcohol? In other words, when it comes to applying this approach across all duties, it seems that they bottled it. Could it be that they choose to grab a quick Budget headline once a year instead of taking an evidence-based approach to alcohol harm like that adopted by the last Labour Government?

I question the logic of creating an additional rate of duty to ciders up to only 7.5% alcohol by volume. A cursory look at the white cider market suggests that many of the products that the Government seek to make more expensive are currently listed at exactly 7.5% ABV, which is the upper band of the new duty applied by the clause. Clearly, while those ciders would be covered by the new band of duty, it would take only an additional spoon of sugar, as the saying goes, to push them up to 7.6% ABV, which is currently covered by the higher rate of duty that is applied to so-called high-strength ciders. Would it not have been a better approach for the Government simply to reduce the lower band of excise applied to higher-strength ciders to ensure that that duty instead applied from 6.9% ABV all the way up to 8.8% ABV? Will the Minister expand on what logic has been pursued by the Government and whether it might incentivise the industry to take more decisive action to reduce the strength of their white ciders or begin to diversify their products?

Amendment 97 would require the Chancellor of the Exchequer to review the impact of clause 54 on the cider industry. The point is to see how far the Government have tried to work with industry to develop and implement a more public health-oriented approach to their products while minimising the impact such an approach has on the industry.

Photo of Anneliese Dodds Anneliese Dodds Shadow Minister (Treasury)

Is my hon. Friend aware that there used to be a differential regime for small-scale cider producers, whose product was often of far greater quality than the kinds that are often linked to alcohol overuse? That no longer exists, partly because of changes at EU level. Surely we need to know more from the Government about what they are doing to support that part of the industry as well as clamp down on the production of very high-volume, high-alcohol product.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

My hon. Friend makes a pertinent point and I am sure the Minister was listening. What have the Government done to work with producers to transition to less harmful products while protecting jobs and livelihoods? That could provide an opportunity for the industry to move into other cider products—perhaps those not so reliant on glucose and corn syrup and using the cheaper pomace, all of which presumably add to the negative health effects. I hope the Minister will speak to the work that the Government are getting on with in that regard.

Amendment 98 would require the Government to review the public health effects of clause 54. I have spoken about the links between alcohol and public health in relation to amendment 103. Amendment 98 seeks to look at the measures set out in clause 54 in the context of the Government’s wider policies on alcohol. Is it enough to simply address mid-strength ciders while continuing to freeze wider alcohol duties? Will this have much of an impact in the context of the Government’s wider policies? That is what we hope to winkle out through this amendment and it will be an important exercise for the Government to undertake. If they are committed to developing policy based on evidence, I do not see why they would not wish to undertake such a review. It can only help to provide a clear picture.

I will not be here on Thursday, so I will not have much of an opportunity to quote Cicero. He identifies that drunkenness on wine, like disease, must be curbed. He also said—I think he was referring to the Ministers—that the wise mind is always devoid of vice and never swells up. That will be their epitaph if they listen to me today.

Finally, amendment 99 looks at the regional impacts of the new duty. We know the cider industry in the UK is concentrated in certain regions—west country scrumpy, for example, Buckinghamshire and Herefordshire, the Welsh seidr and even the Channel Islands, which have had a cider tradition stretching back to the middle ages. In fact, the Minister in those days may have been drinking that sort of Channel Islands cider. What work has the Treasury done to assess the impact of changes to excise duty on production in those regions? That is important and another element of regional economies and regional disparities. Challenging the prevalence of white ciders may have a positive effect on some regional manufacturers while others may suffer as a result. It is important to understand the changes if we are to continue to support British cider producers across the areas I have mentioned and beyond. [Interruption.] Again, I am having bad luck with people moving out of their chairs. It is a trend.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

As long as that? Ten minutes? My word.

I should point out that, under a more active Government—one not simply going through the motions—these measures would already have been taken into account, acted upon and been on offer for proper scrutiny during this debate. Nevertheless, I hope the Minister will see the benefits of the review as set out in our amendment and agree that it is worth while—or that Members will choose to support amendment 98 to see that it is implemented. That brings our amendment on this particular matter to a close. Cheers.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

I rise to speak to amendment 103 in the name of myself and my hon. Friend the Member for Paisley and Renfrewshire South, but I would also like to speak a little more widely about the clauses and the Labour amendments. First, I would like to ask the Minister a question about the post duty point dilution, which was in the Red Book. Hopefully, can answer or get inspiration during the course of the debate. The changes do not appear to be in the legislation, so it would be useful if the Minister could explain when the legislative changes to post duty point dilution will take effect. I understand that the hope is that it will be put into legislation to be enacted in April 2020, but it would be useful if we could have an idea of the legislative process to ensure that those changes are made. I have been lobbied heavily on this by one of my constituents. I know it is important to a lot of people and that the Government have to their credit committed to making changes in the autumn Budget 2017.

Returning to our earlier discussion, I am not clear what the Government are trying to do with the changes to alcohol taxation. Are they trying to incentivise good behaviour; are they trying to disincentivise bad behaviour; or are they trying to generate revenue for the Exchequer? It is important for the Government to clarify that and accept the Labour amendment on the revenue impact on the Exchequer and on public health. That would make a big difference, because we would be clear about the Government’s intentions and what the Government expect to achieve.

On public health, people who want to get drunk quickly often drink high-strength ciders. It is important the changes focus on people who are not drinking for pleasure in the main, but who are drinking to get as drunk as they possible can. Those are the alcohol deaths we are trying to combat in Scotland with the new minimum unit pricing we introduced, which is a clear and well-intentioned public health change. Minimum unit pricing is all about making sure that high-strength alcohols that can be bought very cheaply are increased in price, so that people cannot get hold of them as easily. We predict that we will see a reduction in alcohol deaths as a result of the changes to legislation in Scotland.

What do the Government expect will be the impact of their legislation, particularly the extreme impact on people who are dying from alcohol misuse? What numbers do they expect to see as a result of the changes? If the Government accept Labour’s amendments, it would be useful if the review included the number of people whom they expect to save so that we can measure them against that.

Lastly, it is important that the Government tax this stuff and increase the tax rates as inflation increases. We want the Government to take a step back and a holistic look at the entire system and explain why they are taxing things in the way that they are, rather than tweak and bodge and make changes year on year, as often happens in this place, so that we end up with something that is unwieldy and does not fulfil the intentions of the Bill in the first place let alone the intentions of the world as we see it. Will the Minister provide answers?

Photo of Robert Syms Robert Syms Conservative, Poole

The Government have sensible policies on this. We debated an amendment earlier today about securing jobs in the North sea when there are relatively few jobs on oil rigs. The hospitality industry is one of the biggest employers in the United Kingdom. It is also very important for the tourist industry. The Government have been constantly keeping taxes under review to see what gets a reasonable amount of income and what is fair for consumers.

We also have to understand that we have been through a difficult economic period and incomes have not risen as much as one would like. One of the disadvantages of putting up some of these prices is that it will affect not middle class people, but some of those on the lowest incomes who have every right to enjoy a drink. I therefore think that the Government policy is perfectly sensible.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

I agree that the hospitality industry is incredibly important, particularly to tourism. However, the oil and gas industry supports 135,000 jobs and is also very important to the livelihoods it supports.

Photo of Robert Syms Robert Syms Conservative, Poole

I am sure it is, but I suspect the hospitality industry is 10 times that. The other factor about the drinks industry generally is that it is very regionally diverse, with the scotch industry in Scotland, and wine, cider and beer producers. We all have representations from the owners of breweries, which employ people and are sometimes very important parts of the local economy. We have all had representations from people who run public houses, which are also central to the community. One of the worst things that has happened over the past few decades is the number of public houses that have closed, which has had a material impact on many people and communities. This is a matter of balance, and the Government may be wrong or they may be right, but I think they are more likely to be right because their approach is more likely to secure jobs in the hospitality and brewing industries, and to achieve a proper balance so that people can enjoy a meal or a drink out.

There is a serious alcohol issue, but the producers of wine and beer label things very clearly to show the strength of alcohol. There is a strong “Drinkaware” campaign, so it is not difficult for people to find out the impact of alcohol, but we know there is a hard core of heavy drinkers, many of whom use A&Es and ambulances. It costs about half a million pounds a year to keep an ambulance on the road, and many of them are disproportionately used by people who abuse alcohol. The focus, if there is any focus, ought to be on addiction services and trying to intervene with those who abuse alcohol rather than on the vast majority of people who enjoy a drink.

The hon. Member for Bootle, in his amusing speech—we will miss him on Thursday when he is no doubt raising a cheer to Cicero in whatever he is doing—noted that the industry contributes substantially to the Treasury. Some of those billions of pounds have to go to the NHS because of drinking, but the industry also generates a lot of money for good causes and things that the Government need to provide.

This is a matter of balance, and I think the Government have it right. There may come a time when prices have to go up. If incomes start to rise more substantially—we hope that will be a factor in a few years and that there is evidence that pay is picking up a bit—it may be time to review the taxes, but I think the Government have got this one right.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

I gather there may be a vote in a few moments’ time, but I will begin by addressing, in no particular order some of the points that have been raised by the hon. Member for Aberdeen North. We are interested in the Scottish and indeed the Welsh Government’s actions on minimum unit pricing. It is fair to say that the jury is still out on whether that has been effective, but we will be watching with interest, as will the Department of Health and Social Care and Public Health England, and that will inform the decisions we take at future Budgets.

The hon. Lady asked about post duty point dilution. This is an issue that she has rightly highlighted, and a number of the producers who are likely to be affected by this and who are based in the UK will no doubt be asking the question she has asked. We intend to give this further consideration and lay draft legislation on L-day next year, in the early summer of 2019, with a view to legislating on it in the autumn Budget 2019 and its coming into force from April 2020. While I have spoken to some of the small number of British producers who will be affected and I note their concerns, this is a question of fundamental fairness in the duty system.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

Perhaps I did not express myself very well. My constituents are lobbying for the change to be made; they are not lobbying against the change being made. I was asking when this would come in, because they are hoping for it to come in.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

It is coming in as swiftly as possible, although because of the impact on the small number of British manufacturers, we have given them some time at least—until April 2020—to make any adjustments they might need to.

My hon. Friend the Member for Poole advanced what has been our approach to this issue—a nuanced one that helps those on low incomes to enjoy a drink, particularly at Christmas time. We are concerned, as he is, about supporting the British pub industry. As he says, the number of pubs has declined significantly. It is still declining, although it has stabilised somewhat in the last year or so. We are taking a number of actions, including freezing duties where appropriate, to help to support them.

My hon. Friend also made the point that the drink industry has a significant regional element to it, whether that is the Scottish whisky industry, which is very important to particular regions of Scotland where large numbers of distilleries are clustered in small areas, such as Moray or the areas around Aberdeen, or the cider industry in Herefordshire—where I grew up—and throughout the west country and Wales, which as we have heard has a particular resonance and supports local jobs. We have taken a nuanced approach, but where there are particular interventions that we feel we need to make, as with white cider, we have made them and will continue to make more in the future if that is required.

I now turn to the questions raised by the hon. Member for Bootle in his entertaining speech. I hope, Ms Dorries, that you did not have to reach for a stiff drink in the middle of it, although you might do by the time I have finished. [Laughter.] Well, we are about to talk about the retail prices index and the consumer prices index.

The Government have historically used RPI. We have committed to moving away from it, but we want to do so in a considered and coherent way, as it has a number of impacts elsewhere on the public finances, including on gilts and pensions. Those impacts need to be considered carefully. We do that on a case-by-case basis as we make decisions in Budgets. I will come to the amount that is likely to be raised in a moment, but had we made the decision to freeze wine, that would have cost the Exchequer about £150 million a year, so these are significant sums.

I will come in a moment to a more detailed explanation of what information is in the public domain. The hon. Gentleman asked me specifically, and a great deal of information in this area is published. Through Her Majesty’s Revenue and Customs we publish quarterly revenue receipts for each of the alcohol duty categories. At both the Budget and the spring statement, the Office for Budget Responsibility forecasts for the rest of the financial year. There is no shortage of information in the public domain in this area. I appreciate that that is not always the case, but I do not think that this area requires further reviews or information.

The hon. Gentleman asked about alcohol-related harms, which we all care about. We want to take a nuanced view. Just because we have, on occasion, frozen some of the duty categories—in this Budget, we have done it for beer, spirits and cider, although not for wine —that does not mean that we are oblivious to those concerns. That area is led primarily by Public Health England and the Department of Health and Social Care. We listen to them very carefully, and they contribute to our thinking as we approach every Budget.

As the Minister responsible for these areas, I met a range of stakeholders in advance of the Budget—not just those who produce alcohols, but those who campaign and are interested in alcohol-related harms, and I did the same for tobacco, for example, where there are, of course, similar concerns. We take those concerns on board, and I believe that the Home Office and the Department of Health and Social Care are currently taking evidence on, and will publish next year, a new alcohol harms strategy, which the hon. Gentleman or other Members might like to take part in.

With respect to the hon. Gentleman’s question about why we chose not to reduce the band for high-strength cider, we wanted to encourage, as I think he does, reformulation through a gradient of duty. It therefore seemed sensible not to tax 6.9% the same as 8.5%, but to create an incentive for producers to reduce through a series of different duty bands. That decision was taken as a result of careful consideration and engagement with the craft cider industry, which he and other hon. Members have mentioned, such as those producers in Somerset and Herefordshire I met to listen to their concerns. We wanted to limit the degree to which they would be adversely affected by the actions of larger producers of white cider. I think we all agree that it is unfortunate that, in the course of taking action against producers of white cider, which carries health concerns, we may inadvertently bring into the same rules those who produce craft ciders, which we all enjoy in pubs, which have a particular importance to certain regions of the country and which employ people in the west country and so on.

As we have heard already, the clauses make changes to alcohol duty rates from 1 February 2019. It was announced in the Budget that the duty on beer, spirits and most ciders would be frozen this year. The duty rates on most wine and higher-strength sparkling cider will rise by inflation to generate funds to pay for vital public services. As we have heard, this industry contributes a great deal to the cost of public services. The clauses also set the new duty rate for mid-strength cider.

With those changes, we continue to support the pub industry, which we believe play an incredibly important part in British cultural life. I think that view is shared across the House—during the Parliaments in which I have been in the House, it has been a cross-party matter. The British Beer and Pub Association estimates that approximately 30 million adults visit a pub at least once a year, which clearly shows the significant role pubs play in our lives and our communities.

Pubs are important community assets that promote responsible drinking and provide a place for people to socialise, tackling a whole range of other issues, such as loneliness. We therefore took the decision in the Budget to take further action to support the pub industry. Even today, as pubs continue to diversify with products such as food and gin, approximately half of all pub sales are of beer. It continues to play an essential part in pub revenue, so the Government have frozen the duty on a pint of beer, following on from the freeze in beer duty in our autumn Budget 2017. As a result of our action to support pubs, the price of a typical pint of beer is now 14p lower than it would otherwise have been since the beer duty escalator ended in 2013.

I think the hon. Member for Bootle asked whether we have a policy to freeze duties on beer, or on any other category, in the future. The answer is no. The Treasury considers each duty on its own merits as we approach every Budget. There is no suggestion that the freezes in duties on beer, spirits or cider will necessarily continue in future Budgets, but they will be considered on their own merits. As we approach each Budget, those individual decisions will be determined by the arguments that we have already heard about the cost of living, the importance to regional economies and the protection of pubs and other community assets, as well as public health.

The Budget also froze the duty on spirits. As we have already heard, the Scotch whisky industry is one of the great British success stories. Scotch whisky exports were worth more than £4 billion to the British economy in 2017, accounting for around 20% of food and drink exports in the same year. [Interruption.] I am not quite sure what that sound was—a different type of spirit? [Hon. Members: “Cicero.”] It could be the ghost of Cicero rearing his ugly head again, rather than heading straight to Bootle.

The freeze on spirits duty means that the average tax on a typical bottle of Scotch is now £1.54 lower than it would otherwise have been since the spirits duty escalator ended in 2014. Freezes on spirits duty are instrumental in encouraging investment in the sector. We have listened carefully to the stakeholders who campaigned for many months leading up to the Budget and who made the important point that the Scotch whisky industry is essential to the Scottish economy on a range of levels, from employment, innovation and exports to Scotch whisky tourism, which alone is now worth £500 million a year. The freeze on spirits duty will help elsewhere, too, including through support for British gin—a continuing success story that the Government are happy to back, with production and exports breaking records every year and forecast to continue doing so in the near future.

The Budget also announced that the duty on most ciders would be frozen, meaning that a typical pint of cider is now 2p cheaper than it would otherwise have been since the cider duty escalator ended in 2014. As well as offering support to pubs, the freeze goes a long way to supporting the rural economies that we have spoken about. The decision to freeze was also influenced by a desire to support craft cider producers, who would otherwise be inadvertently affected by changes elsewhere, as I have described. Duties on sparkling cider will increase by RPI in line with inflation. [Interruption.]

Sitting suspended for Divisions in the House.

On resuming—

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

Mr Jenrick, did you want to finish your point?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

No, I am happy to proceed.

Amendment, by leave, withdrawn.

Amendment proposed: 103, in clause 53, page 34, line 14, at end insert—

“(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”—

This amendment would require the Chancellor of the Exchequer to review the impact of the revised rates on cider and wine on public health.

Question put, That the amendment be made.

Question negatived.

Clause 53 ordered to stand part of the Bill.

Clause 54 ordered to stand part of the Bill.