MPs voted unanimously for a review of the beer duty escalator, which was tabled after an e-petition to scrap the escalator hit 100,000 signatures.
Speaking after the three-hour debate, Javid said that in order to stop the escalator, the Government will need to recoup the money from elsewhere. The minister heard from 20 MPs all in support of scrapping the beer duty escalator, and the negative impact it is having on local communities.
He said: “Cancelling the beer duty escalator would cost £35m next year, and £70m the year after. It would mean recouping the money from other areas.”
Javid added that pubs have been closing for many years, and it is not just because of the duty escalator. He pointed to issues such as a change in people’s lifestyles and a change in consumer tastes.
The minister, who has been in the post since the latest Government reshuffle in September, also noted the help that the Government is offering to pubs, such as small business rate relief. He said that reducing corporation tax will help breweries.
Javid also said that that Machine Games Duty, set to come into force in February 2013, will help 70% of pubs benefit from the reduced tax liability. The Government has also made it easier for pubs to host live music.
“This Government recognises the importance of pubs and breweries,” he said. “I think it has been a very valuable debate...and I will take away a lot of messages and make sure the Government does more to help the industry.”
Speaking exclusively to the Publican’s Morning Advertiser after the debate, chair of the All-Party Parliamentary Beer Group, Andrew Griffiths said: “The Government can be left in no doubt about the strength of feelings of MPs and the will to scrap the beer duty escalator. Not a single MP attempted to defend the beer duty escalator. Whilst none of us thought that today was going to be an Eureka-moment, I’m encouraged by what I think is a change of emphasis by the new minister.
“Today, there has been more determination and momentum than ever to get this beer duty escalator scrapped and I am convinced that the rally of Parliament on 12 December is the next step.”
In response to today’s debate, Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “In showing their support for a review of the duty escalator, which is urgently needed, MPs spoke up very strongly today to show the Government that this issue will just not go away.
“I am confident that any review, which we hope the Government will announce, will show that above-inflation increases in Beer Tax do not make sense – they would bring in no additional revenue for the Treasury, but at the same time threaten pubs, employment, and our great British brewing and pub industry. Instead, we could be generating growth, creating jobs, and investing in a real UK success story.”
The Campaign for Real Ale's (CAMRA) national chairman Colin Valentine said: "CAMRA was delighted to see the ground swell of support from MPs from all parties in today’s debate for a review of the damaging beer duty escalator. Passing a motion for the Government to conduct a thorough review of the economic and social impact of the escalator is a major step forward for the industry and sends out a clear message from inside Westminster that enough is enough.
"Building on the success of today’s debate, CAMRA will be upping the ante and looking ahead to its Mass Parliamentary Lobby on December 12th, where over 1,000 beer drinkers and pub goers will be descending upon Westminster to ensure MPs keep the pressure on Government to conduct a proper review and scrap the beer duty escalator."
The Society of Independent Brewers (SIBA) described the debate as a “triumph for British beer, British pubs and British drinkers.”
Chairman Keith Bott said, “We were delighted with the support shown by so many MPs for this debate and by the eloquent arguments put forward by many of today’s speakers.
“We are very proud of the role our brewer, pub and supplier members have played in the process to date, by helping to secure the 100,000 signatures that triggered today’s debate and then lobbying MPs to support it.
“The fact that so many MPs spoke today and then voted for a review shows the value many of them rightly place on the pub and the quality draught beer it sells as vital to the economic and social well-being of their community.
"We hope the Treasury appreciates the strength of feeling that has been expressed here today by members on both sides of the House. A review of the beer duty escalator is vital ahead of the next Budget: Britain’s pubs simply cannot survive these continued hikes which are putting turning a pint into an unaffordable luxury for many drinkers."
Greg Mulholland MP, chair of the All-Party Parliamentary Save the Pub Group, said: "It was fantastic to see so many MPs attend the debate. It was noticeable that every MP that spoke was strongly in favour, not only of the review but to see sense about this tax that does not add up.
"The message is loud and clear from all sides of the House and every part of the country but it's time to recognise the beer duty escalator is not only economically and socially damaging, but also can't be just due to falling revenue."
Nick Bish, chief executive of the Association of Licensed Multiple Retailers (ALMR) said: “If the Government was serious about encouraging more people to drink in the supervised environment of pubs and bars it would undertake a proper review of economic and social impact of the beer duty escalator and learn from it.
“The Treasury has shown it is quite capable of scrapping unpopular taxes. Cancelling the planned 2% duty rise in next year’s budget would cost the Government less (£35m) next year than it spent ditching the pasty tax (£40m) earlier this year."