In its 44-page report Unlocking Pubs’ Potential – published on 26 February by parliament’s largest cross-party issue group – MPs and peers have implored Boris Johnson’s Government to consider the potential of pubs in spearheading high street revival and delivering wide-ranging policy initiatives.
Among its key recommendations, the report calls for a wholesale review of business rates and a cut in beer duty to realise the pub’s potential for the sake of jobs, tourism and cultural and social enrichment.
“As Government charts a new course for national wellbeing, it’s time to wake up to the widespread initiatives pubs can help deliver,” Conservative MP for Dudley South and the All-Party Parliamentary Beer Group’s chair Mike Wood explained.
“During this inquiry, we heard how well-trained licensees are playing an unsung role in supporting the health and wellbeing of individuals and communities; pubs’ investments are regenerating employment and enterprise prospects around the country, showing they can be a critical anchor in bringing left-behind communities back to life.
“But if we’re to take full advantage of all that the nation’s pubs offer as a force for good, we must first tackle their disproportionate tax bills.”
Action on pub pressures
After being delayed by the December 2019 general election, the report has been published following a call for evidence by the group on the economic and social contribution made by pubs, the pressures pubs face and how best to unlock pubs' potential and enable them to thrive.
Its key recommendations revolve around a review of business rates to consider how best to shift the tax burden away from property-based businesses and, pending the Government’s review of business rates, calls for the Valuation Office Agency (VOA) to be better resourced to understand pub business models.
Altus Group rating chairman Stephen Philp recently described the VOA as “starved of resource” at The Morning Advertiser’s MA500 conference in London in February 2020, with Philp calling for “concrete action”.
What’s more, Unlocking Pubs’ Potential suggests all pubs should be able to claim the first £52,000 in rate relief proposed for smaller pubs, and calls for local authorities to understand pubs’ potential in regenerating high streets and communities, and to form mutually beneficial partnerships.
Additionally, it calls on Government to seize the opportunity provided by Brexit to review both the intent and impact of duty, highlighting UK brewers as a manufacturing success story.
Extraordinary community resource
Inquiry panellist and Labour peer Lord Roy Kennedy added pubs are a precious asset in an increasingly polarised society and one of the only remaining places where strangers can rub shoulders and trade opinions.
“They are also one of the unsung props of the UK’s social care system; helping tackle loneliness, providing meals for the elderly, coffee clubs for young mothers, and answering the needs of dementia carers,” he continued.
“We have an extraordinary community resource in our pubs: as community hubs, sports clubs, creative incubators, tourist attractions, fundraisers and as the ‘third place’ in people’s lives. They’re the UK’s real ‘social networks’ but are paying 34% of their turnover in tax, compared to Facebook’s reported 1.7%. If Government is looking for ways to boost hard hit communities and revive national wellbeing, our message is clear: act now to unleash pubs’ potential.
“As our inquiry learnt, pubs are paying more in tax per pound of turnover than any other outlet on the high street and any other sector of the economy. These costs are then being compounded by competition from lower-priced alcohol from supermarkets.”
Calls for reform
The publication of Unlocking Pubs’ Potential follows widespread calls for reform to the beer and pub sector from both MPs and the wider hospitality sector.
Earlier this month, MPs called on the Government to back 250,000 supporters of a campaign to reduce the tax burden on pubs and breweries while long-awaited business rates relief promised to thousands of pubs in January 2020 has been delayed for some councils until April due to ‘software changes’.
What’s more, a London restaurant started a petition calling on Home Secretary Priti Patel to revoke her application of the term ‘unskilled’ to workers from outside the UK, and opposing changes to visa requirements for EU workers which have been described as potentially ‘disastrous’ for the hospitality sector.
“This important report rightly recognises that pubs are much more than a place to drink, they’re the heart of the community, bringing us together and enriching our lives,” Emma McClarkin, chief executive of the British Beer & Pub Association, said of the report.
“They’re a force for good, putting back into society, creating local jobs and genuine career opportunities.
“It’s vital the Government continue to recognise the role pubs play in boosting national wellbeing. That starts with a cut in beer duty and fundamentally overhauling business rates to help keep community locals open.
“It’s now on Chancellor Rishi Sunak to listen to these calls and deliver a Budget that helps pubs.”
UKHospitality (UKH) chief executive Kate Nicholls added that pubs are fantastic economic and social assets. “As the All-Party Parliamentary Beer Group’s report rightly shows, they provide jobs and investment in every region of the UK and they also provide social hubs and places to unwind with friends, do business with colleagues or meet likeminded people," she explained.
“They are one of our high streets’ biggest assets, although they have struggled against crippling taxes for too long. The report makes a number of sensible recommendations in line with what UKH has been calling for. We hope the Government acts upon it to help pubs do even more for their communities.”