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Beer Duty Escalator

Volume 557: debated on Tuesday 29 January 2013

14. How much revenue will accrue to the Exchequer from the beer duty escalator in each of the next three years. (139725)

The Government have inherited plans to increase alcohol duties by 2% above inflation until 2014-15. The extra 2% is forecast to increase beer duty receipts by £35 million next year and £70 million the following year.

What proportion of that money is collected through pubs? Is it a relatively small amount? Will my hon. Friend consider removing this tax from pubs, many of which are central to community life in our towns and villages?

My hon. Friend is right to raise this issue, and he has contributed to many debates on it in this House. Making the change would mean lost revenue, and we would have to find another way to cover that loss. He may find it useful if I point out some Government measures that have helped pubs, such as the changes in the annual investment allowance, the cut in the small profits rate of corporation tax and the extension of small rate relief holiday.

Why does the Chancellor refuse to review the impact of alcohol taxation? Is he worried that it will show the effect of VAT on the prices in our pubs, and the impact that is having on our pub sector?

The hon. Lady will know that the beer duty escalator was introduced by her Government. This Government have inherited those plans and are carrying them out. If she does not like this tax, perhaps she could make a stronger case if she tells us how she would cover the lost revenue.