Thank you to those who have been in touch about beer duty and supporting our pubs. As some of you may know, in my role as tourism minister I meet regularly with the hospitality industry.
There are over 100 pubs in my constituency employing more than 1,500 people, so I recognise and appreciate the contribution they make locally as well as nationally. This is a huge industry in the UK which has suffered immensely from the pandemic.
Many people have expressed serious concerns for what lies ahead for pubs. I share these concerns and I know my ministerial colleagues do too. I do believe that the Chancellor's Winter Economy Plan puts in place a good level of further support to help tackle the challenges businesses like pubs now face. The Job Support Scheme will help participating businesses ensure employees on reduced hours earn a minimum of 77% of their normal wages, helping keep people across the country paid and employed.
It is also good news for pubs that the temporary reduction of VAT to 5% is being extended by a further three months to the end of March 2021. This is one of the key asks I have heard in calls with the hospitality sector over the last few months. The Chancellor will also defer VAT repayments through a new scheme until March 2022. Businesses are also being given more time to access crucial loans alongside a more flexible repayment scheme for existing ones.
I should also mention that these new measures follow a robust package of support 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. The unprecedented Job Retention Scheme has rightly protected over 9 million jobs through the most difficult period of the pandemic, which I am sure has been a relief and comfort to many.
The targeted support measures announced recently provide further assistance through the Job Support Scheme to retain positions, especially in those sectors facing lower demand. For areas facing business closures due to restrictions, Local Restrictions Support Grant scheme provides a cash grant up to £3,000 per month. Businesses are also being given more time to access crucial loans alongside a more flexible repayment scheme for existing ones. The Government announced on 5 January 2021 an extra £4.6 billion to protect jobs and support affected businesses and includes a one off additional grant of up to £9000. Local Authorities in England will be given an additional £500 million discretionary funding to support their local business and builds on the £1.1 billion discretionary funding which Local Authorities have already received
Following the national lockdown in November, the new tier system will allow pubs and the hospitality sector to begin to open up more widely. Pubs, restaurants and bars in Tier 1 areas will reopen for table service and should close by 11pm with last calls taking place at 10pm. In Tier 2 areas, pubs and bars that operate as restaurants can continue to serve customers within the restricted hours, although alcohol should only be served as part of a substantial meal. In Tier 3 areas with a very high alert level, the hospitality sector must close except for takeaway, delivery and drive thru services.
In national lockdown, pubs are allowed to sell food and non-alcoholic drink as take-away. Under the lockdown restrictions however, hospitality businesses are not permitted to sell takeaway alcohol. This is to reduce instances of social interactions that could undermine the Government’s primary objective of reducing the spread of COVID-19. They can, however, do home deliveries of alcohol.
I recognise that wet-led pubs will not be able to open as fully as those that serve meals under the high and very high alert tiers. Every business forced to close will receive grants of up to £3,000 a month under the Local Restrictions Support Grant and local authorities are being provided with a further £1.1 billion to support businesses in their area. Where businesses are not required to close but are severely affected by restrictions in Tier 2 and Tier 3 areas, local councils will receive funding to provide grants up to £2,100 for each 28-day period.
With regards to 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.
As pubs play such a big role in British society, 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 and I will continue to lobby for support for our pubs. 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.
I hope the information above clarifies how the Government is supporting our pubs, and reassures you that we will do what we can to help them stay open after a difficult few months.
Thanks again to those who took the time to contact me about this.