Finance Bill

I agree with that point. Actually, I agree with all three of the points that the hon. Gentleman made and I would probably add a fourth, which is the smoking ban. I accept that in some pubs that might have attracted more customers, particularly those pubs that have a reputation for serving food. Customers, in many cases, like to eat food without people smoking in the same building. There are other pubs where many of the customers might have felt that their enjoyment of the pub was closely linked to their ability to smoke in that environment, too. That is opening up another debate that I do not wish to open now, but I acknowledged at the outset—perhaps I should have acknowledged it in slightly greater detail—that a number of social and, in some cases, legislative factors have impacted on the ability of pubs to attract customers and to be profitable. I accept that that is the case, but my point is that that difficult economic situation is compounded by above-inflation increases in beer duty. Let me explain that point, because it is very important that people understand. I am not simply making a sentimental case for pubs, although I do have a sentimental attachment to them. There are some hard figures that should give the Government cause for reflection. In January—four or five months from now—VAT will increase again by 2.5 per cent. when the Government's temporary VAT reduction expires. In April 2010 and April 2011—this has already been factored in—beer duty will increase by 2 per cent. above inflation. That is the so-called duty escalator that was announced last year, so that beer is priced out of the range of people who are seeing, if they are lucky, inflation increases in their salaries. Some people are not even seeing that. A pint of beer is becoming more expensive for people as a proportion of their income and in real terms, too. That is a deliberate instrument of Government policy. That leaves aside whether, for example, the core ingredients are becoming more expensive. In other words, fundamental costs are being borne by brewers and passed on. They will eventually go through the pubs to the customer, and so the customer will have to meet that extra cost. For example, they will have to meet brewery or transportation costs, with fuel duty and other considerations of that type. Beyond all those factors there is a built-in increase of 2 per cent. above inflation each year on duty on beer.