Preseli MP Stephen Crabb has joined calls for the Chancellor to reconsider changes to a scheme which has transformed the small brewing sector in the UK.
In a joint letter to Rishi Sunak, Stephen Crabb argues that changing Small Breweries’ Relief (SBR) will put a great British success story under threat at a time when many businesses are struggling to survive.
SBR has provided the basis for growth and innovation in the brewing sector and means there is a small brewery in nearly every constituency, employing 6,000 full time jobs and contributing £270 million to GDP each year.
Under the current system, small breweries pay a proportionate amount of tax on the small amount of beer they produce compared to the global companies that dominate the industry. Up to 5,000 hectolitres – which is about 900,000 pints – they pay 50% of beer duty to the Treasury.
Plans announced by the Treasury in July will see the 50% threshold reduced from 5,000 hl to 2,100hl – meaning that over 150 small breweries will have to pay more tax. At the same time, those larger in size will pay the same amount of tax or less. The Treasury also proposes converting the relief to a ‘cash basis’ which could see support for all brewers receiving SBR being eroded away.
Pembrokeshire is home to a number of small breweries, including Bluestone Brewing, Gwaun Valley Brewery and the newly establish St Davids Old Farmhouse Brewery.
Stephen Crabb said: “Our small independent brewers are a real success story, and the support provided through Small Breweries’ Relief is key to their future. These businesses have been severely impacted by the Covid pandemic and now is not the time to be making changes to this scheme.”
Chief Executive of the Society of Independent Brewers, James Calder said: “SBR has been a great success, revolutionising brewing in the UK and allowing more brewers to start up and compete against the global companies that dominate beer in our country. The Chancellor is forcing changes on small breweries, which we have not asked for and do not support. The Treasury needs to urgently reverse course, not reduce the 50% threshold below 5,000hl and give the industry something to cheer about.”