Dear Constituent,
Thank you for contacting me about pubs and beer duty.
Pubs make a vital contribution to our national life, not only as places of employment and economic activity, but as hubs of community and culture. We are lucky to have so many excellent examples locally, and I fully recognise their importance, particularly in rural and small-town areas like ours. Such as the Sir William Peel Pub in Sandy, which has recently been awarded East Bedfordshire CAMRA Pub of the Year and East Bedfordshire Cider Pub of the Year. It is always a pleasure to visit local pubs and meet all the brilliant members of staff.
I am concerned about the Government’s Business Rates Reform and its impact on local pubs and breweries. Despite Government MPs standing on a manifesto pledging to avoid raising tax on “working people”, at the 2024 Autumn Budget, the Chancellor, Rachel Reeves, announced £40 billion of tax increases, the largest in a generation. These tax rises included imposing a £25 billion tax on working people by increasing employers’ National Insurance. This hit the hospitality sector particularly hard, given its typically high staffing overheads. I signed a cross-party letter before the Autumn Budget, urging the Chancellor to rethink. Disappointingly, the Chancellor cut the discount rates for small businesses, hitting them with a new stealth tax. This budget risks pushing already pressurised pubs over the edge.
£1 in every £3 spent in a pub goes straight to the Treasury, and beer duty rates are now up to 12x higher than other European nations. This Government’s fiscal policies risk squeezing the life out of British pubs. The National Insurance hike, minimum wage rise, and the increase to business rates have led to a third of venues now running at a loss.
My colleagues in the Conservative Party and I want to make life easier for pubs. As announced by the Shadow Chancellor, Mel Stride, the Conservatives would scrap business rates for most high street businesses and pubs altogether. Nearly 250,000 businesses would benefit from the relief, delivering substantial savings that can then be reinvested in better premises, more staff and lower prices, and lifting thousands out of business rates altogether. The relief would be capped at £110,000 per business.
I understand that the Beer and Pub Association (BBPA) trade body has called on the Treasury to introduce a business rate carve-out to protect struggling pubs from closure, and I will be sure to follow any developments closely. I am proud of the last Government's record of supporting pubs and will continue to urge Ministers to address the challenges faced by the hospitality sector.
Thank you again for taking the time to contact me.
Sincerely,
