Pub industry 'could be nationalised by 2020'

By Ellie Bothwell contact

- Last updated on GMT

Related tags: Government

Chris Snowden: 'Intervention upon intervention will lead to failure'
Chris Snowden: 'Intervention upon intervention will lead to failure'
The pub industry could be “on its way to nationalisation by 2020” if anti-pubco campaigners continue to lobby for more statutory regulation, a research fellow at the Institute of Economic Affairs predicted.

Chris Snowden said the sector could be under state-ownership if the “pub preservation movement” continued to win victories in parliament like the market rent-only option. He defined “pub preservers” as the Campaign for Real Ale and members of the Parliamentary Save the Pub Group and Fair Deal for Your Local.

He said Government plans to strengthen legislation for pubs listed as assets of community value will lead to more derelict pubs — because the “real problem” was a lack of buyers — which might lead to the Government “buying pubs themselves”.

“Intervention upon intervention will lead to failure,” he said. “If we distort the market so much, there will be no market left and the only people who can look after pubs will be politicians. This is what I mean when I say by 2020 we could be on our way to some kind of state-ownership of pubs — if they are regulated in such a way they are not able to be run by viable businesses,” he said.

“Similar to national heritage sites — the physical building is preserved but the spirit of the pub is not.”

He said that if politicians were “genuinely committed” to the pub trade they “could and should halve alcohol duty and amend the smoking ban” so pubs can allow smoking in at least one room.

“What are the chances of that happening? Very little. We will have to endure the nauseating sight of MPs crying crocodile tears at the demise of pubs,” he said.

Related topics: Legislation

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Wait & See

Posted by Concerned, Mavis Enderby and Old Bollingbroke,

Well, now the Lords have seen sense, as well as a reluctant Government, and not to mention 9 years of unsatisfied Select Committees... I and many other hundreds, possibly (probably) thousands of former tenants and lessees, will be feeling some cold comfort. Never mind "nationalising pubs" - let's just ERADICATE the ghastly pubco movement

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Scaremongering and mischief

Posted by Karl Harrison,

There's this constant scaremongering from academic lobbyists "bought and paid for" by one commercial sector or the other. "Letting fish get the upper hand is bad for our oceans", to "the dangers of stopping smoking", to "its risky to let horses run free when they could be in burgers" to this now from Chris Snowdon. Chris I see replies below - he's a bright guy and should know better but has a mortgage to pay I expect. The self-interested, libertarian right has long arms and deep pockets. Anyone can do anything as they as approve of it and regulation or rules of any kind are a bad thing for markets. Which isn't true of course and the heavily regulated US market is probably a good example as its way more successful than the UK. Sensible rules (and particularly to protect smaller players in markets) properly enforced are healthy for markets. Rugby without rules and a referee is essentially a large brawl where the big guy wins all the time. I don't think Chris likes the pubcos any more than most other normal people. The beer tie itself is anti-competitive and flies in the face of both liberal and libertarian commercial thinking. No true market progressive thinks its a good idea. The MRO is a step in the right direction and Chris knows that to be the truth, I think. Let me know if I'm wrong Chris.

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Nationalising Pubs

Posted by Nigel Wakefield,

Paul C's comments make a lot of sense, we all know that Pub Co pubs are over rented, the recent RICS report makes this abundantly clear, where average rents are 7.5% of FMT. FMT is in far too many cases a considerable over estimation of the potential trade, making profitable trading in the real world a thing of dreams. The failure rate confirms this. If the Government nationalised all the pubs that failed and were supposedly unsaleable as pubs.
Put realistic rents and rates on them, where the incumbents were able to invest in the properties with an option to purchse at some stage, the industry would become a life time career again. Pub Co rents at Arbitration and PIRRS are coming out at an average of close to 7.5% of actual turnover, giving them a reasonable chance of viability. The MRO if used realistically could be the makings of leased and tenanted pubs, whether the large Pub Co's will see the opportunity to take advantage of the option, I fear the dogmatic attitudes of these companies is too ingrained to see the real chance for everyone to make serious money and have leases with real values.

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