MPs back beer duty cut in parliament hospitality support debate

Multiple MPs backed a cut in beer duty during a debate in parliament tonight on support for the hospitality industry.

The question was submitted by North Devon MP Selaine Saxby who highlighted that the sector’s rent debt has hit £2b despite millions lost in sales and owed in loans over the last year, while areas of the sector such as caterers, wholesalers, events and weddings have also missed out on many grant payments.

She warned government support “will taper off before the sector returns to profitability” and “may be ending too early relative to its lockdown lifting roadmap” and said a cut on draught beer duty could play a “crucial role” in preventing businesses from failing later in the year.

Kate Griffiths, MP for Burton, urged for a cut in draught beer duty to “level the playing field” between venues and supermarkets, which Wolverhampton North East MP Jane Stevenson suggested could be funded by adding a small cost to beer sold in supermarkets. Many recognised that up to 60% of pubs will still not be able to reopen outdoors from 12 April and will need further support.

Several MPs asked for other ways to support pubs, such as the ban on takeaway alcohol sales during lockdown being lifted and for the VAT cut to be extended to alcohol sales.

Many urged for the VAT cut, business rates holiday and the furlough scheme to be extended even further to benefit the whole sector, including Alistair Carmichael, MP for Orkney and Shetland. He described hospitality as a "sector on life support” for which “some of the intensive care will have to continue”, while Patricia Gibson, MP for North Ayrshire and Arran, said the end of reduced VAT on 30 September was a “cliff edge” that could be a “death knell” for many businesses.

Although Charlotte Nichols, MP for Warrington North, pointed out these measures “don’t make up for the losses that have accrued and continue to accrue”. She and several MPs pointed out the “cash crisis” that is facing businesses – more than 50% of companies in the sector have three or fewer months’ worth of cash left – and called for solutions such as not having to start paying back loans until companies start growing again, converting Coronavirus Business Interruption Loans (CBILs) into grants and a solution to rent when the current moratorium ends.

This week the government published an interim report on its review of the business rates system but gave no indication of any plans for change. A final report setting out priorities for reform will be published in the autumn.

The wedding and event sector was also recognised as an area in distress and Mary Robinson, MP for Cheadle, suggested an ‘Eat Out to Help Out Scheme’ to encourage early weekday weddings to help the sector cope with the backlog and demand, while several underlined the importance of government-backed event insurance to give event organisers confidence to plan.

Manchester Central MP Lucy Powell said that for the events sector the government’s reopening roadmap led “to a brick wall” that for many was still too uncertain.

“We need a real plan to support hospitality to thrive," she said. "The overhaul of business rates that’s long overdue, real action on debts, loans paid back on an income contingent basis, a proper job support scheme... More sector support, especially for the wet-led pubs… and public health guidance that makes operating viable.”

In response, business minister Paul Scully recognised that hospitality is “the lifeblood of our communities, our society and our heritage” and although it was “not possible to compensate every company for every pound lost”, support had been targeted “with the aim of saving as many otherwise healthy businesses as possible”.

He urged councils to use additional restriction grant funding “generously” and to distribute it quickly, for example the £56m Welcome Back Fund announced earlier this week. He also acknowledged more needed to be done to give the wedding sector certainty for reopening and committed to “redouble efforts” to see this done.

Photo: Flickr – UK Parliament