The pub and brewing sector will be the key to high street regeneration, community cohesion, and growth — but only with the right government support, a new cross-party inquiry has concluded.
Commissioned by the All-Party Parliamentary Beer Group (APPBG), the new report — How Brewing and Pubs can Help Drive Economic Growth — sets out 10 recommendations for government that will help drive investment and growth in the sector.
The report heard evidence from a multitude of brewers, operators, and pub companies, industry experts, and trade bodies and charities, demonstrating how breweries and pubs are foundational to the whole UK economy.
The UK’s pub and brewing sector is a major economic force, with 1,700 breweries and 45,000 pubs operating in every Parliamentary constituency. Together, they support more than one million jobs and contribute £34.3 billion in economic value — more than some industries highlighted in the government’s growth strategy — and generate £18 billion in annual tax revenue.
Hospitality also employs one in 10 workers, making it the largest source of youth employment, part-time jobs, and opportunities for people without degrees. With the right policies, the sector could grow by 6% a year, create half a million new jobs by 2030, and drive inclusive growth across the UK.
Despite this, the report finds that the cumulative impact of recent regulatory initiatives is choking investment, profitability, and the potential of the sector.
“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,” said Tonia Antoniazzi MP (Labour, Gower), chair of the APBG.
“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.”
She added: “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, benefiting local communities, policy makers and government.”
To turbo-charge investment and growth, both in the sector and the UK economy, the cross-party group of MPs is making the following recommendations:
- 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.
- 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.
- 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.
- 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 five years
- 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.
- 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.
- A review of the impact of the Coronavirus Business Interruption Loan Scheme (CBILS) to encourage investment and unlock growth.
- 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.
- Extend capital allowances to include pub furniture and kitchen or cellar equipment, with double capital allowances for any project that supports net zero.
- Set the definition of alcohol-free beers at 0.5%, aligning with European norms, benefiting consumer clarity and encouraging further innovation, and providing a catalyst for further growth and investment in this increasingly important category for public health.
