Campaign for Pubs

Government again fails pubs during their greatest crisis as Chancellor cosies up to global brewers and ignores publicans

The Campaign for Pubs has slammed the Chancellor, Jeremy Hunt for failing to deliver the support that the UK’s pubs and small brewers need to get through the cost-of-living crisis. The Chancellor ignored calls from publicans and through the wider hospitality sector for an urgently needed VAT cut to mitigate the cost-of-of-living crisis, but instead delivered a multi-million pound tax break to global brewers and giant pubcos, showing who the Chancellor and this Government listen to and care about.

The Autumn Statement did include another year’s extension of essential business rates relief for many pubs and a reduction in employers National Insurance contributions, but these measures are not enough to deal with the impact of very high energy bills, rising prices and consumers with less money to spend. The Campaign for Pubs and other hospitality campaign groups had been calling for a VAT cut to give direct support to pubs and restaurants, to allow them to get through this crisis. Once again, these calls fell on deaf ears with Jeremy Hunt and Rishi Sunak as usual listening only to the lobbyists of the big brewers and pubcos, something that has been the case through the Conservatives 13 years in power.

The current crisis has led to a deeply worrying escalation of pub closures. Figures from the Altus Group, measuring the number of pubs that have closed down permanently because they have either been demolished or converted for use as homes or offices, shows that 383 pubs, more than two a day, permanently closed in the first six months of this year, almost matching the total for the whole last year, when 386 were permanently lost.

The cost-of-living crisis and continued inflation is putting huge pressure on pubs and publicans, with rising prices and bills, the increased cost of brewing and beer prices combined with consumers having less disposable income. This crisis follows the Covid-19 pandemic and three nationally imposed lockdowns and further months of restrictions, which saw pubs lose a huge proportion of revenue for 18 months and many pubs (and small breweries) still have significant debts they are paying off, which makes the current situation even more difficult and indeed impossible for some pubs and publicans and breweries.  This doesn’t seem to be understood by the Government and HMRC, who continue to demand repayment for Bounce Back Loans and deferred VAT bills, despite the fact that there is another crisis now, one that many publicans and brewers say is even worse.

The current level of Government support is wholly inadequate and the survival of many pub businesses now depends upon direct and properly targeted Government action focused on pubs themselves. Direct support is desperately needed in the form of a VAT cut. Cuts to beer and other alcohol duty have minimal impact on pubs but funnel huge tax cuts directly into the pockets of global brewers, giant pubcos and multinational drinks producers, so it is a VAT cut that is needed to help pubs. The Campaign for Pubs made a submission to the Treasury consultation in October called on the Government to introduce such meaningful direct support for pubs.

At the same time as pub closures have escalated, small breweries have been closing at a rate never seen before, with around 90 breweries having closed their doors over the last year, yet the Chancellor announced nothing to support small breweries and indeed an overall duty freeze disproportionately benefits the biggest breweries, so allowing them to increase their stranglehold on the UK beer and pub market, reducing consumer choice.

Dawn Hopkins, Vice-Chair of the Campaign for Pubs and a publican in Norwich said:

“My heart goes out to all my fellow publicans who, like me, would have been desperately hoping for some positive news for our amazing, world famous pubs in the Chancellor’s Autumn Statement. Instead, we are facing a lack of interest in our beloved pubs from the Government, which is overseeing, and allowing, the permanent closure currently at the rate of two pubs a day.

“If the Government wants to see this appalling rate of closures slow down, it must act to give us targeted, meaningful support now – a cut in VAT and a long overdue overhaul of the unfair business rates system. Freezing alcohol duty will make little if any difference to a trade already suffering from sky high utility bills, ever increasing rents and of course the cost of living crisis. Once again, this Government has shown it doesn’t understand or care about the pressures our publicans are under and the loss of vital local assets so many communities are facing”.

Paul Crossman, Chair of the Campaign for Pubs and a publican in York said:

“The current Government have shown that they don’t care about pubs closing and have shown who’s side they are on, it’s the global brewers and big pubcos and developers, not publicans, pubs and the communities that value them.

“Yet again, Jeremy Hunt trots out the myth that an alcohol duty freeze will help pubs, when the reality it is makes negligible difference and does nothing to deal with the real issues of rising bills and prices and the whole cost-of-living crisis. All it does it give a big tax break to the big brewer and pubcos. Once again Jeremy Hunt and Rishi Sunak have shown that they won’t help pubs and will stand by as they fail, they are out of touch and thankfully, nearly out of time”.

Phil Saltonstall, brewer representative of the Campaign for Pubs and founder of Brass Castle Brewery said:

“It comes as no surprise that the multinational brewers and their linked pub companies have been swift to thank the Chancellor for measures announced that do vanishingly little for small independent operators while providing significant rebates for high-volume producers.  As small brewers and their publican colleagues face ever more challenges to trade, the pseudo-monopoly of multinational brewers prove again that they have the power to lobby effectively and skew government response in their favour to stifle competition from UK SME brewing businesses.

“Small brewers are nimble, resilient and our best advocates for the quality and variety in the nation’s favourite drink.  Sadly, the autumn statement does nothing to support these key cultural and societal assets, while instead rewarding multinationals that seek to homogenise our beer drinking experience.”