The Autumn Statement, to be presented in Parliament by chancellor Jeremy Hunt a month from now, will be make or break for many pubs.
For some, it may already be too late to save them. During the first half of this year, 383 UK pubs shut their doors for good, according to commercial property analyst Altus Group. That’s just three short of the total for all of 2022. Wales, London, and the North West have been affected most.
Business rates will be a key factor in pubs future. At the moment leisure and retails businesses currently have a 75% business rates discount. However, this is due to end at the start of the new financial year in April. Also — double whammy — business rates are due to rise by September’s rate of inflation, 6%.
Energy costs may have fallen, but as we all know they are still high by historical comparisons. Drinks need to be chilled, food needs to be cooked. Hospitality venues are energy intensive. Then there is inflation. Many ingredients and materials have rocketed in cost. To stand a chance of keeping a business afloat, these costs have to be passed on to customers. And those customers themselves are feeling the pinch, especially if they have a mortgage.
So, all eyes on the chancellor. It’s an old campaigning line, but pubs are at the heart of our communities and their value, in terms of social cohesion and mental health, is immeasurable. It’s no understatement to use the word crisis. The chancellor really does have to see what he can do to stop the flood of pub closures.
In my part of the world, West Cornwall Inns is closing four of its pubs this weekend. The Queens Arms, Breage, Henlys, in Helston, Marazion’s Fire Engine, and the Coldstreamer, at Gulval, will shut their doors. These are not quiet pubs. They had a busy summer and turned over £2m. Yet the owners cannot make them economic.
In a statement, West Cornwall Inns’ Matt Ferguson said: “Due to the current economic climate, together with the spiralling costs of electricity, food, and drink throughout this summer, we are not in a position to trade into winter and it would be irresponsible to attempt it.”
He added: “Put simply, a £2m turnover is still not enough to make any profit, or increasingly even cover costs, as the outgoings in this industry are now just too high. Hospitality has gone very wrong and we would urge those in positions of power to change that to act now, as we join a growing list of casualties.
“Our biggest regret is that we are forced to let down our wonderful, loyal staff.”
The Campaign for Real Ale (CAMRA) is urging members to write to their MPs ahead of the Budget, urging them to lobby the Chancellor on behalf of Britain’s publicans. The organisation wants the chancellor to:
- Reduce duty on draught beer and cider, cutting tax on pints in pubs to help them compete with the likes of supermarket alcohol;
- Replace business rate relief schemes in England which are due to end next year, with money to do the same in Scotland, Wales, and Northern Ireland;
- Make sure energy supply and pricing issues are fair for hospitality businesses; and
- End the ban on take-home draught beer and cider from most pubs and festivals.
“This really is a make-or-break moment for the future of the nation’s beloved pubs and social clubs, which are at the heart of community life,said CAMRA chairman Nik Antona.
“In August, the government’s new alcohol duty system introduced a lower rate of tax charged on draught beer and cider served in pubs, clubs, and taprooms. To really protect and promote pubgoing, the chancellor should reduce draught beer and cider duty further, and give our locals a fighting chance with the likes of supermarket alcohol.
“The Government should also axe the red tap which bans pubs selling take-home beer and cider from draught-duty containers which is a lifeline, particularly in rural communities.”
He added: “As customers continue to tighten their belts, licensees, brewers, and cider makers face an uncertain economic future as they don’t know what their business rates or energy bills will look like in the next year.
“That’s why the licensed trade and consumers will want to see the chancellor taking action to guarantee a fair deal from energy supplies for hospitality businesses — and crucially to extend help with business rates relief in England beyond April next year, and allocate money to do the same in Scotland, Wales and Northern Ireland.”
