It's time to question our business models

At a business meeting held after an Association of Licensed Multiple Retailers council meeting in November 2007, one of the senior economists from the Royal Bank of Scotland told the gathering that they were confident the economy would have a soft landing in 2008, with growth slowing from 2.9% in 2007 to about 2.3%.

A number of us expressed our view that the outcome would be more difficult. It is fair to say that no one was then forecasting quite the collapse that followed.

Perhaps that lack of comprehension of what was actually happening in the real economy from a senior economist at one of the biggest banks in the world explains their subsequent experience, and is also an indication of how difficult it is to understand trends, particularly when the trends reach an inflexion or tipping point.

It strikes me that governments seem to be throwing as much money as they can at economies in order to return to the old order. These actions will certainly impact on all of us for the rest of our lives and are likely to impact on our children's lives, too.

A huge debate is emerging as to whether the very rules of capitalism are likely to change, that Government involvement in many areas of the economy is going to become more noticeable.

Will the Royal Bank of Scotland ever be privatised? Should banks have a "public good" or "utility" aspect to their activities? If they mess up so badly that the only rescue can come from the Government maybe we should keep hold of them for good.

If recovery means a return to another bubble, to more debt, more shocks — is that what we really want?

In our own sector what will a return to normality mean?

Maybe now will be the time when all existing models in our sector are reviewed and queried under the conditions that prevail, not those of five or even 10 years ago.

Here are a few potential questions:

—What is the appropriate level of rent to turnover to achieve a sustainable model for landlord and tenant?

—Where will "putting, making and keeping good" fit into full repairing and insuring (FRI) leases in the new world?

—Will yields on pub properties revert to pre-securitisation levels?

—What is the likely number of viable pubs in this country?

Here's another thought. Having increased public debt to close to 10% of GDP in order to encourage spending, will the Government leave our industry alone — or feel duty bound to raise a few million quid to show their "health" credentials?