Unlock “Economic Power” of Britain’s Pubs and Breweries Government Urged

A new parliamentary report has called on the Government to support Britain’s brewing and pub sector, arguing that targeted policy measures could unlock significant economic growth across the hospitality industry.

The study, prepared for the All-Party Parliamentary Beer Group, (APPBG) outlines ten policy recommendations designed to stimulate investment and expansion in the on-trade. Researchers gathered testimony from brewers, publicans, sector specialists, and representative organisations to assess the industry’s economic contribution and growth potential.

Britain’s brewing and pub sector represents a substantial component of the national economy, with approximately 1,700 breweries and 45,000 licensed premises operating throughout the country. The industry supports more than one million jobs and generates £34.3 billion in economic value annually, whilst contributing £18 billion to the Treasury through taxation.

The hospitality sector serves as a major employer, particularly for young people, part-time workers, and those entering the workforce without university qualifications. According to the report’s findings, appropriate policy intervention could enable annual growth of 6% and create 500,000 additional jobs by the end of the decade, driving employment opportunities across communities nationwide.

However, the research highlights concerns about the cumulative effect of recent regulatory measures on the sector’s ability to achieve this potential.

Tonia Antoniazzi MP (Labour, Gower), Chair of the All-Party Parliamentary Beer Group, said: “We set out to gain an overview of why brewing, pubs and the wider hospitality sector was left out of the government’s Industrial Strategy, how the current pressures stack up for brewers and pubs, and what might be needed to help the sector not just thrive but drive economic growth in all our local communities across the UK.

“What this report makes clear is that this critical sector has been overlooked and overburdened with tax, resulting in missed opportunities for growth and investment to the detriment of the whole UK economy.

“As the MP for Gower, I am acutely aware of the sector’s impact. I’m delighted to represent four breweries and 62 pubs. These are vibrant, innovative businesses, at the heart of their communities, providing 1,300 local jobs in Gower, stimulating local supply chains and attracting tourists through their fabulous hospitality and warm welcome.

“Our recommendations provide a platform for creating the right fiscal and regulatory environment to enable the brewing and pub sector to deliver economic growth very quickly, benefitting local communities, policy makers and Government.”

To drive investment and growth, both in the sector and the wider economy, the cross-party group of MPs is making the following 10 recommendations:

1. New terms of reference for the Hospitality Sector Council strategy, to ensure early-stage discussion with all relevant Government departments as well as full integration with the growth strategy, tourism strategy, high street strategy and small business strategy.

2. Meaningful Business Rates reform in the form of a 20p reduction in the small business multiplier, and a 20p reduction on the standard multiplier, with better transition relief to avoid sharp shocks and enable businesses to plan.

3. The removal or reduction of employer National Insurance Contributions (NICs), including removing NICs for the first year of employing someone under 25 or the introduction of a new employer band from £5,000 to £9,100 at 5%, and a 12-month NICs holiday for a business employing those who have been out of the labour market for 12 months.

4. That any future increases to the National Minimum Wage are sustainable and affordable, and specifically the application of the Living Wage to all those aged 18 and over, which should be phased in over at least 5 years

5. That Government work more closely with industry on policy and regulation at the planning stage. Finding a solution to the Extended Producer Responsibility (EPR) issue of double counting for pubs and to ensure the Employment Bill doesn’t unduly penalise the sector for its inherent flexibility and seasonality.

6. Reform the approach to apprenticeships and investment in employment and skills, including in brewing innovation, reinstating access to level 7 apprenticeships, and allowing the use of Apprenticeship Levy funds for other accredited training.

7. A review of the impact of the Coronavirus Business Interruption Loan Scheme (CBILS) to encourage investment and unlock growth.

8. Reduce beer duty by a minimum of 5%, and increase the draught beer differential to 20%, alongside a reduced rate of VAT on sales of food and drink.

9. Extend capital allowances to include pub furniture and kitchen or cellar equipment, with double capital allowances for any project that supports Net Zero.

10. Set the definition of alcohol free beers at 0.5%, aligning with European norms, benefitting consumer clarity and encouraging further innovation and providing a catalyst for further growth and investment in this increasingly important category for public health.

A Government spokesman said: “Thriving pubs are at the heart of our communities and have a key role supporting economic growth across the UK.