My hon. Friend is always full of innovative ideas, but he makes a serious point about tax avoidance, which this Government take very seriously and will continue to do so. Clearly, the more we clamp down on tax avoidance and tax evasion, the greater our scope to act more flexibly with measures such as beer duty. May I take this opportunity to thank him for the work that he does in chairing the all-party beer group and my hon. Friend the Member for Leeds North West (Greg Mulholland) for his work in chairing the all-party save the pub group?
The Government recognise the importance of brewers and the contribution that pubs make to our local communities and the wider economy. Unfortunately, the number of pubs has been declining for decades, but that reflects the changes in consumer tastes and in lifestyles. The number of pubs continued to decline in the early 2000s, despite relatively flat alcohol duties in real terms. None the less, we continue to support pubs through our policies. For example, the drop in the small profits rate from 21% to 20% in April 2011 has supported thousands of small businesses such as pubs. About a fifth of pubs currently receive a reduction in the business rates they pay. Small pubs can also benefit from small business rates relief or rural rates relief, and the Government have extended the small business rates relief holiday until March 2014.
The majority of pubs have also benefited from the reform of gaming machine taxation introduced on 1 February, and they have the opportunity to benefit from the Live Music Act 2012, which came into force last October, making it much easier for pubs to put on live music events. On top of that, in January the Government announced plans for a statutory code alongside the independent adjudicator to ensure fair practice between large pub companies and their tenants on issues such as rent and the price publicans pay for their beer. The Government will be consulting on those plans shortly, and I hope that Members present will make pubs and publicans in their communities aware of the proposals.
Let me talk about our wider economic policy, which includes the strategy to reduce the record budget deficit that we inherited. That strategy has led to lower interest rates, which benefit people who have mortgages. If interest rates were just 1 percentage point higher, the average mortgage would go up by almost £900 a year, which is money that could be spent in pubs, and companies up and down the country would pay another £10 billion in interest in servicing their loans. Clearly, low interest rates have been helping companies, especially small and
medium-sized companies. Our record increase in personal allowances has also put more money in people’s pockets, which they can use in their local pub. My hon. Friend the Member for Amber Valley (Nigel Mills) mentioned the change in fuel duty, which means that rises that we inherited from the previous Government have not gone ahead, and that again has meant more money in people’s pockets.
I want to say a quick word about our alcohol strategy. Moderate alcohol consumption can be positive for people’s well-being, but the Government are committed to tackling cheap alcohol and irresponsible alcohol consumption. We have therefore reformed beer duty to support responsible drinking. In October 2011, duty was halved on low-strength beer, while duty on high-strength beer increased by 25%. That was warmly welcomed at the time by many hon. Members and by CAMRA.
The Government have also had a consultation on minimum unit pricing, and we will be announcing the results very shortly. My hon. Friend the Member for Burton made some excellent points about responsible drinking.
In the interests of time, I shall conclude my remarks. I am glad that we have had the opportunity to discuss beer duty, brewers, pubs and the alcohol strategy, and we have had, I think, a constructive debate. I hope that I have reassured hon. Members that the Government fully support pubs and brewers. As I have shown in some of the examples that I have cited, the Government have already taken action in that regard, and, despite our tight fiscal situation, I am keen for them to go further. Hon. Members will understand that I cannot make any specific commitments on action; we have to leave that for the Budget. None the less, as one of my hon. Friends mentioned, I like to be seen as a listening Minister, so please be reassured that I take the matter seriously, and that today’s debate has served to underline its importance.