Thank you for contacting me about beer duty and support for pubs during the pandemic.
I share your concern about the future of pubs and the hardship caused by the coronavirus outbreak.
On the impact of the lockdown on the sector, I voted against the imposition of a second lockdown and deeply regret the impact it will have on many businesses in all sectors. I do not believe that the current measures are supported by robust evidence and that by causing immense immense to the economy they will inevitably cause great harm to people's health and well-being.
To begin with beer duty, in 2013, the Government took the decision to end the beer duty escalator, and beer duty has been frozen or cut several times since then. Duty on spirits has been frozen over the past two years. As a result of these changes, a typical pint is cheaper than it would have been had these measures not been introduced. I share your concern about the future of pubs and the hardship caused by the coronavirus outbreak. The steps taken by HMRC to make it easier to claim back the duty on any beer thrown away as a result of pub closures were a timely and sensible intervention.
I welcomed the announcement that for only the second time in 20 years every alcohol duty has been frozen, meaning that this freeze covers duty on spirits, beer, wine, and cider.
I want to see the Government continue to support pubs and keep costs down for consumers. Any decision to modify alcohol duty in the future is a matter for the Treasury. I have ensured my colleagues are aware of the points you raise and reminded them of the importance of local pubs in our communities. There is a broad recognition of the need to reform the current duty system to support the alcoholic drinks and pubs sector in the longer term, and a call for evidence is due to be published before the end of 2020.
Among other measures to support businesses at this time, it is reassuring that no pub or other business in the hospitality sector will be required to pay business rates this year. Local authorities will apply the rates relief automatically and no action is required by pub rate payers.
I also welcome the temporary cut to VAT from 20 per cent to 5 per cent for all food and non-alcoholic drinks, which initially applied from 15 July 2020 to 12 January 2021, but has been extended to 31 March 2021. This will continue to support restaurants, pubs, bars, cafés and similar premises across the UK. The Eat Out to Help Out scheme has supported thousands of businesses and help protect the jobs of over a million employees. Pubs, restaurants and others that participated will be fully reimbursed for the discount by the Government.
Turning to the wider issues facing pubs following the second lockdown, it is clear the economic effects of fighting COVID-19 last longer for businesses than the duration of any given restrictions, and we need to go further with our support. I welcome that the Coronavirus Job Retention Scheme has been extended until March in response to new national restrictions, and to give people and businesses across the whole United Kingdom the certainty they need over what will be a difficult winter. Under the extension, the Government will pay 80 per cent of wages up to a cap of £2,500, with employers paying employer National Insurance Contributions and pension contributions only for the hours the employee does not work. Flexible furloughing will be allowed in addition to full-time furloughing. I also welcome that the temporary reduction of VAT to 5 per cent is being extended by a further three months to the end of March 2021. Additionally, the Chancellor will defer VAT repayments through a new scheme until March 2022.
I am glad that the selling of takeaway food and alcohol is permitted. I note that the sale of takeaway alcohol is limited to delivery or pre-order collection, and should be done in accordance with other restrictions and licensing requirements.
It remains the case, however, that pubs able to sell alcohol for consumption off site as part of their licence are being treated differently to, for example, supermarkets, off licenses and licensed shops selling alcohol. It seems odd that we will be able to turn up as normal at a supermarket and buy a bottle of wine or a crate of beer but be unable to do the same from a pub. Ministers need to provide further detail on the justifications for this. If there is a way that we can safely provide a level playing field for our pubs, I believe that we should do so, as they are the life blood of our local communities, and this kind of measure might mean the difference between our pubs being open next year or not.
I am pleased that a robust package of support has been introduced since the start of the pandemic. No pub or other business in the hospitality sector will be required to pay business rates this year. HMRC has made it easier to claim back the duty on any beer thrown away as a result of pub closures. The Business and Planning Act made it easier to serve customers outdoors through temporary changes to planning procedures and licensing.
I appreciate that there have been calls for a specific additional support package for pubs. I am very hopeful that the existing support provided will be enough, but evidence continues to be collected on the impact of the pandemic on the hospitality sector generally, and on pubs specifically, and I will keep this under review. Should the need arise, I will press Ministers to step in with further support for our pubs.
Thank you again for taking the time to contact me.
Craig Whittaker MP