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Mr. Chris Bryant (Rhondda): Does the hon. Gentleman accept that subsection (10) of proposed new section 36C on page 112 would not create the cliff-top situation mentioned by the hon. Member for Christchurch (Mr. Chope) earlier? Actually, the individual brewery will receive the benefit up to 30,000 hectolitres in that year, and then will pay duty only on the amount in excess of the limit. Future decisions might be affected, but in the specific year the brewery will not suddenly face that collapse.
Mr. Davey: The information that I have received from the brewers is that many will have their commercial decisions affected in the way that I describe, so I cannot necessarily agree with the hon. Gentleman. There is a taper in the new relief, but it applies below the threshold, not quite in the smooth way that he seemed to imply above the threshold.
Moving away from the principle behind the amendments, may I seek clarification from the Minister on one or two specific points? Many brewers who are reading the Bill do not understand what the Government are trying to do. For example, the first condition, which is set out on page 114 in proposed new section 36E(4), refers to the eligible amount of beer produced in the previous year. Obviously, breweries can calculate that amount from their sales figures, but the second condition refers to the amount that is expected to be brewed in the future. Brewers will have to try to work out whether they are eligible for that relief, but they are not sure which production level will count. So they need guidance from the Minister, or from Customs and Excise officials, to work out whether they will be eligible. What baseline should they use to judge their eligibility?
Other concerns have been raised with me. For example, some people have queried the fact that the Government have chosen to use the figure 365 in the calculation that appears on page 114 in proposed new section 36E(5). Obviously, that figure refers to the number of days in a year, but the Independent Family Brewers of Britain informs me that no brewer brews every day of the year. That association wonders why the Government have based their calculation on something unrelated to brewers' production schedules.
The final point on which various brewers have asked me to seek clarification relates to proposed new section 36C(3), in which the Government try to define a relevant breweryfor example, whether it can consist of a group of breweries and how the brewery is formed. The concern is that the Government suggest in part of that section that the definition relates to the employees. If an employee is a member of a brewery or a group of breweries, he or she can attract the relief. However, the implication is that if that person decides to change jobs in that year and works for another brewery that is not a member of the group of breweries, the first employer will not be entitled to the relief.
Mr. Boris Johnson (Henley): I rise in wholehearted support of the amendment moved by my hon. Friend the Member for Christchurch (Mr. Chope). I speak on behalf of one of the 27 breweries not to be favoured by the Bill, unlike the other 320 that are to be favoured by it. Like my hon. Friend, my heart leapt when I heard the Chancellor speak of measures in the Budget to help small breweries, because I thought that he must mean Brakspear in my constituency.
Hon. Members will be familiar with Brakspear's bitter. If they are not, they jolly well ought to be. I do not mean to cast aspersions on any of the other excellent beers that are brewed in my hon. Friends' constituencies, but they will agree that Brakspear's is the finest because it is brewed by the traditional double-dropping method and therefore contains a higher quotient of hops than most normal beers. Indeed, when I was at school, my school had a contract with Brakspear. We were supplied with Brakspear's beer every Sunday. I am a living testament to the benefits of that drink.
Imagine how surprising and saddening it is not just for me, but for a great many people in my constituency and elsewhere, to find that Brakspear is now, after more than 200 years, at serious risk of ceasing to brew. It is highly likely that Brakspear will no longer be able to brew the bitter for which it is famous. Inspector Morse used to drink Brakspear's bitter. It is a great shame that that traditional English beer should be coming to an end.
Why is it coming to an end? Brakspear is facing adverse trading conditions in many different ways. I had a long conversation on Friday night with a chief executive who is extremely alarmed about the national insurance hikes, and so on. He is extremely upset by the Chancellor's decision to favour 320 microbrewers and not to favour the 27 other brewers about which the hon. Member for Kingston and Surbiton (Mr. Davey) spoke eloquently. Plainly, the 27 othersincluding Brakspearshould be included in the exemption outlined in the Budget. I see absolutely no reason why the threshold cannot be raised to 200,000 hectolitres, given that, as has been repeatedly pointed out, that falls in line with European Union recommendations anyway.
Brakspear is a small brewery, it is a local brewery and it is under serious threat of ceasing production. It makes an absolute nonsense of the Government's claims to favour choice, diversity and old businesses to push through a measure that could expedite its closure. It should be helped, and I hope that the Financial Secretary will respond creatively and imaginatively to the sensible amendments that have been supported by both main Opposition parties, and do his level best to save Brakspear
Mr. Boateng: The shadow Chief Secretary will appreciate the problems of discussing the individual tax affairs of individual companies at the Dispatch Box. He would be the last person to encourage me to go down that route. Hon. Members who have breweries in their constituencies are perfectly right to raise their constituents' concerns, however, and I know that Customs and Excise is still in discussion with several of those breweries. We await with interest and eager anticipation the outcome of that discussion as to whether those breweries qualify, at least in part, for relief.
I have heard the heartfelt pleas of the hon. Member for Henley (Mr. Johnson), who opined about the imminent demise of a brewery that served his alma mater. I would hate to go down in history as the Financial Secretary responsible for depriving the boys of Eton college of their favourite brew. Deprived and underprivileged as they are, to deprive them of their beer would really be the last straw. We have all heard, with varying degrees of sympathy, the pleas made by hon. Members about individual breweries, but they will understand why I cannot deal with those individual cases.
Mr. Bercow: I am just a poor state school product from Finchley, so I would not know about the highfalutin matters being described by the Financial Secretary. The commercial pressures faced by brewers on the one hand, and the financial costs incurred by beer drinkers on the other, represent the context of our discussion. Will the Financial Secretary therefore demonstrate his grasp of the issue by telling us, for the current financial year, what proportion of the price of an average pint of beer is accounted for by tax and excise duty?
Mr. Boateng: It would be most unwise, in considering this question, to suggest that small regional breweries are likely to go out of business as a result of anything that this Government have done. [Interruption.] I shall come to the hon. Gentleman's question in a minute. However, it is hard to accept that a brewery with an annual production of 70,000 hectolitres and a turnover of £8 million will be threatened if it does not receive relief worth just 1.5 per cent. of its total turnover. It is similarly hard to accept that such a brewery will be priced out of the market because brewers with a turnover of less than half that receive some relief. To suggest that, as a result of the measure, some brewers will be put at a competitive disadvantage is to over-egg the pudding a bit.
Kevin Brennan (Cardiff, West): My right hon. Friend has hit the nail on the head. Can he explain the logic behind the Opposition's argument? They suggest that the measure will not result in a fall in the price of the beer produced by small brewers and yet they claim that the fall
Mr. Boateng: I find it very difficult to fathom the logic in the arguments of Opposition Members. They are opposing for the sake of opposing, and that is their right. I suppose that, if we were in their position, we would do likewise. However, we are not likely to be in their position for a very, very long timepartly because of the success of the measures outlined in the Budget.
What got me in the questions of the hon. Members for Buckingham (Mr. Bercow) and for Christchurch (Mr. Chope) was the suggestion that this Government were something other than the friend of the beer drinker and the brewer. I hope that the hon. Member for Buckingham knows what has happened to duty, because it is dangerous to ask a question the answer to which one does not already know. That is why his question is surprising. I feel constrained to point out to him that duty, as a proportion of the retail price of a pint of beer, was 32 per cent. in 1991. Today, it is 29 per cent. That is a fall of 3 per cent. Beer duty has been frozen for the last two Budgets, and that has saved British beer drinkers a very large amount of money.
I challenge the hon. Member for Buckinghamperhaps he will be so good as to take note of the challengeto write to me to show whether, in any period of the Conservative Administration, he can point to a similar record of support for the industry.