Steve McCabe MP calls on Chancellor to save small breweries before it’s too late

Steve McCabe MP has written to the Chancellor of the Exchequer urging him to drop current plans to reform Small Breweries Relief which will have a devastating impact on small breweries in his constituency and threaten their future.

The changes to Small Breweries Relief will lower the threshold for breweries to stop receiving some tax breaks on the beer they produce. The government intends lowering the threshold for which breweries are entitled to SBR from 5,000hl to 2,100 hl.

SBR was introduced in 2002 and gives any brewer producing less than 5,000hl of beer annually a 50% discount on beer duty. Once a brewery starts producing more than 5,000hl, the relief is lowered. Critics of the scheme claim it acts as a disincentive to smaller breweries expanding but breweries in Selly Oak constituency are telling Steve it will have the opposite affect.

The government say these changes are intended to support growth, boost productivity and remove the tax cliff edge but what they are actually doing is removing relief from some very small breweries and will have the opposite effect to incentivising growth.

Small Breweries Relief could be reformed so that it works better, by tapering the rate at which relief increases once you meet the threshold. This would remove the threshold without damaging small local breweries as current changes stand to do.

Steve McCabe MP recently met with Attic Brew in Stirchley, who started production a little under 2 years a go and run a popular taproom at the weekends. The local success story has become a staple in the Stirchley community, their success has enabled them to expand recently which will take their annual output to 3,000hl. They told Steve that if they had known these changes to Small Breweries Relief were planned, they would have been discouraged from expanding.

Steve McCabe MP said:

“The Government urgently need to reconsider these changes which will have a devastating impact on breweries in my constituency. They say the changes will support growth but in reality it will have the opposite effect and could see swathes of small brewers across the country facing financial difficulties.

“No one is saying we shouldn’t reform the relief so it works better to encourage growth, the government could taper the rate relief so that it’s reduced gradually once you meet the 5,000hl threshold rather than removing it altogether. At a time when we are facing a recession, it is reckless and completely unnecessary to threaten small businesses. The Chancellor will be doing the right thing if he agrees to rethink this matter. I really hope he will listen”

Oli Hurlow, co- founding partner of Attic Brew in Stirchley, said:

“These changes are potentially devastating for our business. We have worked really hard to increase our production and our business plan is based on receiving Small Breweries Relief. Smaller breweries provide a disproportionately large number of jobs in the UK beer industry, due to lack of automation and small economies of scale. These changes threaten our already tight margins, meaning we are less likely to be able to take on new employees at a time when jobs are so desperately needed.”

Read Steve’s Letter here

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