Campaign for Pubs
Budget 2021: The Chancellor must offer direct and properly targeted support to pubs and small brewers to enable them to survive
The Campaign has written to the Chancellor on behalf of publicans – the people who actually run our nation’s pubs – urging the Government to support pubs properly and directly, targeting support to ensure it actually helps pubs and those who run them and rely on them. The Campaign has also made a submission to the budget laying out the key measures needed to save pubs and to help the smaller brewers whose businesses have been hardest hit by pubs being closed under lockdown.
The Prime Minister last week announced the series of stages of when pubs can open again, with outdoor opening scheduled for 12th April, and indoor opening, with restrictions, from 17th May. This means that many pubs still face prolonged closure and some will not be able to open viably until June, so urgent support is needed now to get pubs through till summer and further support will be needed over the next year, to allow pubs to get properly back on their feet.
The situation for pubs and publicans is very serious. Many publicans are now in significant and rising debt with ongoing costs and bills, and many families are facing hardship. After losing so much trade over the course of a year, and with restrictions in place till June at the earliest, many pubs need more support just to survive. In addition, many publicans are reporting that they don’t even have the money to be able to stock their pubs to re-open them, with the cost of doing so running into thousands of pounds, money that many publicans simply do not have.
So increased support must be announced in the budget to save pubs and to help those who run them get through until they can viably trade again, and then ongoing, into next year, to allow pubs to get back to trading profitably and to survive.
The Campaign are calling on the Chancellor to support all pubs – not just ones that do food.
Many traditional ‘wet-led’ pubs have been amongst the worst hit and have had the least support. These pubs, like all pubs, are not even being permitted to do takeaway beer and cider, so with no option to do food takeaway this means no trade at all for such pubs. They were also excluded from any support from the existing 5% VAT on food and accommodation and excluded from the Eat Out to Help Out (EOTHO) scheme. Ironically, they were then directly discriminated against, without evidence, by the discredited substantial meal rule, which led to many being unable to open or forced to close again.
The Campaign for Pubs is also calling on the Chancellor to support pubs directly, through VAT cuts and a business rates holiday, measures that will directly benefit pubs and publicans.
Yet there are strong rumours circulating that, instead of a VAT cut for all pub sales, the Chancellor will cut beer duty, which would not benefit pubs directly, but instead would funnel millions of pounds of tax relief to global brewers, to pubcos and the investment and hedge funds that own or back them. Given the very serious situation the UK now faces, both economically and fiscally, the Campaign for Pubs believes it would be wrong and utterly misplaced for the Government to provide millions of pounds of tax relief to supermarkets, global brewers and the largest pubcos, when it is pubs and publicans and Britain’s smaller brewers that need help most seriously and urgently.
A general cut in beer duty would also make it even harder for the UK’s smaller brewers, the ones hardest hit by the closures of pubs, to compete with global brewing giants. Already many big brewers are offering deals to pubs to stock their product upon reopening and there is a real danger that many small brewers, who can’t offer discounted product due their own Covid losses, will be squeezed out.
Instead, the support should be in the form of 5% VAT for all sales – at the same time as scrapping ill-considered plans to hike taxes on smaller breweries, through changes in small brewers duty relief.
The Campaign for Pubs is calling for the following support in Budget 2021
Measures for pubs
- Continued and increased closure grants until pubs can open indoors, with household mixing and no curfew.
- A statutory code for landlord/tenant negations to deal with all commercial rent, including a statutory right to a rent review for all tenants.
- There must also be an extension on the moratorium of evictions of tenants.
- Business rates holiday for 2021-22 with a commitment to implement a new and much fairer system from April 2022.
- VAT of 5% on all on-trade (only) sales for 2021-22. All pubs, including wet-led pubs, to get support through lower VAT, not just those that sell food (or provide overnight accommodation).
- 50% written off all hospitality Bounce Back loans, due to the extended period of closure which is very significantly beyond what was expected/predicted when they were offered.
- Reduce (or better still scrap) deferred VAT bills for hospitality. Businesses cannot and shouldn’t be asked to pay business taxes when the Government has stopped them trading.
- Flexible furlough extended until all restrictions on hospitality are fully lifted.
- Clarification of how the Job Retention Bonus will be honoured.
Measures to help breweries/supply chain:
- A tailored package of support, including business rates relief for small brewers & other suppliers, whose businesses are threatened by pubs being closed.
- Scrapping the proposed changes to small brewer’s beer duty rate relief) which will close breweries.
These measures would allow pubs to have a realistic chance to trade their way out of this awful situation, to enable them to pay off debts and to re-establish a stable and sustainable income for pubs, publicans and their families as well as helping small brewers and other suppliers hardest hit by pub closures.
Dawn Hopkins, Vice-Chair of the Campaign for Pubs and a licensee in Norwich said:
“The Chancellor has the chance to save thousands of much-loved British pubs in Budget 2021, but will only do so if he announces adequate and direct support for pubs and publicans, the people who actually run our nation’s pubs.
“This means direct support for pubs, so 5% VAT for all pub sales and no business rates for another year as well as adequate grants till indoor opening. Indirect assistance via general cuts in beer duty would predominately benefit global brewers and offshore pubcos, and VAT cuts just on food and a repeat of Eat Out to Help Out give a huge boost to McDonald’s and KFC, but do nothing for the traditional British pub. With limited support available, the Chancellor must focus on where it is most needed.
“So if Rishi Sunak truly wants to save pubs, he needs to focus support directly on pubs and all pubs to save our unique and important community locals as well as focusing brewing support on smaller brewers that have been hardest hit by pubs being closed”.
Paul Crossman, Chair of the Campaign for Pubs and a publican in York said:
“On Monday as part of his road map announcement the Prime Minister promised that the Government would not “pull the rug out” and would “continue to do whatever it takes to protect jobs and livelihoods across the UK”. All eyes are now on the Chancellor to deliver on that promise and to provide the increased level of ongoing, properly targeted support that is so desperately needed to ensure our pubs and other hospitality businesses can be there to lift the nation’s spirits later this year, as we collectively emerge and recover from this period.
“In the face of stringent restrictions and enforced closures our pubs have risen to every challenge willingly, working as hard as possible to keep our colleagues, customers and communities safe. Proper support, invested in this Budget, to protect our desperately missed pubs through this final stage will be amply repaid once pubs are fully functional again, and able to make their customary contribution to the nation’s welfare, culture and economy”.
Commenting, Phil Saltonstall, Brewer Coordinator for the Campaign for Pubs and MD of Brass Castle Brewery and said:
“It’s time for the Chancellor to get into the detail and put support where it is needed to hold together the fabric and character of the UK’s hospitality industry. That means targeted measures to save our pubs, publicans and the independent breweries that supply them.
“A cut in overall beer duty will not help a small brewery like mine, or hundreds like it. Beer duty is paid to government by breweries. As a brewer in a time when the nation’s finances are so stretched, it is hard to see how an overall reduction in beer duty could be prudent. In reality, it would simply reduce small UK breweries’ ability to compete with large multinationals and, in turn, reduce our ability to support local pubs with independent, unique and local beers. The possibility of a reduction in beer duty for on-sales has been floated, but that will represent only a few pennies on the pint. It wouldn’t provide the parity with supermarket alcohol prices that is mistakenly sought by those who don’t grasp the multi-layered value of the pub environment and the costs required to maintain it.
“The vibrancy of the UK brewing industry has been fuelled in recent years by a specific duty relief aimed at small breweries (SBR) entering the market. The UK government has already announced reforms to SBR that represent an increase in tax burden for smaller breweries and a further competitive gain for larger breweries. Alongside the COVID pandemic and the closure of pubs, that announcement is another hit to be borne by small breweries. Broad measures, taken at pace, were appropriate at the beginning of the pandemic. To revive the UK’s fabulous pub heritage, government support must now go where’s it’s needed – actually to publicans and also to small brewers affected by the closure of pubs.”
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