‘Triple whammy’ will hammer pubs unless MPs act

By Helen Gilbert

- Last updated on GMT

Fears for future: pubs are facing tough choices as tax burdens hit
Fears for future: pubs are facing tough choices as tax burdens hit

Related tags: Pub sector, Public house

The future of pubs is under threat from taxation, rate increases and an end to rate relief, campaigners have warned.

Speaking ahead of the Taxation of the Beer & Pub Sector parliamentary debate - due to be heard today (Tuesday 31 October) - the Campaign for Real Ale (CAMRA) warned that more pubs could close unless politicians took steps to start supporting the industry, which employs around 900,000 people and contributes more than £23bn to the economy.

The group, which is calling for the introduction of a £5,000 pub business rate discount, warned that licensees were already struggling with the 2p per pint price increase on beer duty which came into force in March and were also facing a further 2p per pint rise in November’s Budget.

Vital British industry

CAMRA also claimed publicans faced a ‘second blow’ this year when a change in the business rates system resulted in four in 10 pubs facing rates hikes, and declared that some pubs could go out of business when the temporary £1,000 a pub rate relief ceases in March 2018, leaving alehouses to absorb the full force of the increases.

The third threat is the upper limit on annual business rate rises for community pubs – up from 12.5% to 17.5% – which could mean the "difference between survival and closure for many vital local pubs" CAMRA added.

“The debate today is crucial to highlight the issues the pub sector faces and MPs have to realise they need to call on the Chancellor to start showing more support for this vital British industry,” Colin Valentine, CAMRA’s national chairman, said.

Overburdened by tax

“The beer and pub sector is already overburdened by tax, specifically business rates and beer duty – with tax making up a third of the price of a pint in a pub. Customers now find the price of beer less affordable, which means decreased sales and the likelihood of more boarded-up pubs.”

Valentine warned that failure to support pubs would result in “more people drinking at home, less local employment and reduced Government revenue”.

“Time and time again, independent research has shown how vital the pub and brewing sector is to the country as a whole. It’s time MPs listen to beer drinkers and pubgoers in their constituency, and demand the Chancellor takes notice,” he insisted. 

No longer viable

Carl Ernsting, who runs the Star Inn in Halesworth, Suffolk, said: “We experienced a business rate increase of almost £10,000 and that combined with other increases will mean that our village pub that has traded since 1841, will no longer be a viable business.”

Martin Wood, licensee at the Hope Inn, Stockport, Greater Manchester, added: “Since the rate increases and beer duty escalator, we have had no choice but to put our prices up. Along with that, and the fact we have to pay more VAT than supermarkets, there has been a significant drop in trade to the point we now struggle week on week, wondering if we can pay our way going forward.”

Related topics: Legislation

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