PRESS RELEASE

Campaign for Pubs

Date: March 3, 2021
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Disappointing budget for pubs is not enough to save many as the Government continues to discriminate against traditional locals

The Campaign for Pubs has responded to the “disappointing” budget for pubs, as announced by Chancellor Rishi Sunak stating that it is not enough nor properly targeted to save many pubs and discriminates against the classic community local.

The Campaign for Pubs had specifically called on the Chancellor to ensure that all pubs, including thousands of traditional ‘wet-led’ pubs, would be supported through a VAT cut for all pub sales, but this has been ignored and such pubs continue to be discriminated against, despite being part of the fabric of communities up and down the country and part of our cultural identity.

Instead, the Chancellor has just extended the VAT cut on food and overnight accommodation, which helps some pubs, but does nothing for many non-food pubs whilst giving millions of pounds of tax relief to fast food chains.

The budget was also very disappointing for the nation’s small breweries, many of which have suffered losses due to pubs being closed. There was no support announced for them and worse still, the Government still seem intent on pressing ahead with plans to hike taxes on many small brewers through changes to small brewers’ duty relief.

The Chancellor did announce a business rates holiday until the end of June, then for the rest of the financial year, business rates at two thirds discount of their normal level. This is disappointing, when pubs will only just have managed to reopen without restrictions when rates are charged again. The Campaign for Pubs had called for a business rates holiday till 2022. Considering that pubs have lost so much trade due to Government restrictions, it is wrong that the Government is hitting them with tax bills like this, at all.

The Campaign has welcomed the closure grants for pubs, but has also stressed that they are only enough to just about allow publicans to get through to reopening and that many will continue to rack up debts through ongoing rent and other costs including VAT bills. The restart grants will simply not provide enough for pubs to be able to also cover the considerable costs of reopening and restocking their pubs.

The grant levels, as had already been announced are based on the rateable value of pubs, meaning many smaller pubs, that don’t benefit from the VAT cut on food, also receive the lowest level of grant.

  • £8,000 for pubs/businesses with a rateable value of £15,000 or under
  • £12,000 for pubs/businesses with a rateable value of £15,000 to £51,000
  • £18,000 for pubs/businesses with a rateable value of over £51,000

Pubs with outdoor areas are expected to be able to open on 12th April, but many pubs, especially traditional wet-led pubs, don’t have adequate outdoor space to be able to do this. All pubs are expected to be able to open again indoors on 17th May but still on the basis of having to offer table service only, which means many pubs will not be able to operate profitably or, in the case of many smaller pubs, to operate at all. So it will be June at the earliest before pubs can open more normally, and before many will have any chance of being profitable. The Campaign for Pubs is therefore calling on the Government to drop the unnecessary table service rule from May, to allow pubs to operate safely, as they did last summer and to be able to have a chance of trading profitably.

The Campaign for Pubs has welcomed the announcement of the £150 million fund for communities to access to help buy and save their local pubs, however the Campaign has pointed out that unless pubs get through to trading profitably, and without changes to planning law, many pubs will simply be developed and demolished before communities have the chance to save them. The Campaign is also concerned that the new funding might be snapped up by cynical property owners holding out for higher prices from community buyers, unless further controls are implemented. So the Campaign is calling for urgent changes to stop any pub being re-developed or given change of use in cases where there is a buyer willing to offer the market value of the pub as a going concern, something that would stop thousands of pubs being lost through cynical ‘predatory purchasing’ by developers and supermarkets.

The Campaign for Pubs is now, again, urging the Government to take action to stop the fact that some pub-owning companies and commercial landlords continue to charge full rent on closed pubs, something that is the biggest threat to their survival. So far the Government have refused to act on this, only producing a meaningless voluntary code of practice, which has been wilfully and widely ignored. So the Campaign for Pubs are calling on the government to support individual publicans being exploited by large property companies and actually take action via an immediate statutory code of practice and right to a rent review, with more far reaching reforms to the Landlord and Tenant Act also required.

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

“This is a disappointing budget for pubs when thousands of publicans were hoping that the Chancellor and the Government would listen and save our world-famous pubs. It seems that Rishi Sunak either still doesn’t understand or doesn’t care about the classic community local pub, as he has yet again has discriminated against them with a continued food-only VAT cut that funnels millions to the likes of McDonalds and KFC who don’t need it, but does nothing for wet-led pubs.

“In addition to ask pubs to still pay some business rates when many will only just have reopened is unfair. Considering that pubs have lost so much trade over the last year, the Government shouldn’t be imposing business rates at all until 2022”.

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

“There were many disappointing omissions from this budget. While we welcome measures such as income support for the newly self-employed who were unfairly excluded from previous schemes, we note that directors of limited companies, which will include a great many small pub businesses, and the nation’s small breweries, have still been left out.

“Further grants are welcome, but the restart grants that have been announced will simply be insufficient to enable most pubs to even cover ongoing fixed costs while closed, let alone enable them to restock and reopen. Even the furlough scheme, while great for our staff, will continue to carry a cost for struggling publicans, as we will continue to have to find NI and pension payments and to cover holiday entitlement in order to protect jobs.

“The offer of more loans will not appeal to businesses who are already extremely worried about escalating debt. This is especially the case for those still facing unreasonable rent demands, which is something the Chancellor failed to address at all, a worry which is compounded by the fact that we were not given the extra full year of business rates relief that we were hoping for.”

ENDS

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