by Peter Watt
I love the pub; going for a pint has been a Watt family thing as long as I can remember. I look back and smile when think about going for my first pint with my Dad at The Tatnam pub in Poole. It was a special rite of passage. One that I repeated with my own son only last year. The Tatnam was our local family pub where we went at Christmas and special occasions. It was where, over the years, my Dad went and met a few “bar mates”. In fact, it was where over the years we all gathered whenever we got together as a family. And it was where we continued to take my Dad over the months when he was dying. His last pint there was a few days before he died. Going with him was a ritual that we all valued, a comfort at a terrible time. After he died, we again all went there, and there was a picture of him behind the bar for months.
The Tatnam closed last year and is now a supermarket.
Of course, pubs are closing all over the country. This year, although the rate of closures has slowed, they are still closing at a rate of 25 per week. At the end of 2010 there were 1300 fewer pubs than at the beginning of the year, with a loss of 13,000 jobs. We all know why this is happening, cheap supermarket booze, the smoking ban and lifestyle changes. Tax on alcohol has been steadily rising with the alcohol duty escalator raising duty by 2% above inflation. The recent budget added about 4p to the price of a pint of beer – 5p in my local. There are, of course, some sound public policy reasons for the smoking ban and alcohol duty rises. But there is also no doubting the heavy price being paid by our pubs.
So what? Well if pubs are just seen as any other retail outlet then I agree – let them close. But the local pub is so much more than a place to eat and drink. In villages, towns and communities across the country, the pub, along with the post office, is very much the heart of the local community. It is where people meet and can enjoy a drink with friends. My own local, the Chessington Oak, is still a thriving local pub. It has a football team, a pool team and regular charity nights. It has a family restaurant area and many local groups use it as a social meeting point. But it also has a community of regulars who meet and share stories or just unwind. If you really want to know what is going on, then you can usually find out while buying a pint. It really is an important local community asset.
Before the last election, the campaign for real ale (CAMRA) produced a Charter for Beer Drinkers and Pub Goers. It was supported by 670 candidates. Subsequently, EDM 210 on community public houses received the support of over 270 MPs. It stated:
“That this House recognises the social, economic and cultural importance of well-run community pubs, which provide a safe and sociable environment for the consumption of alcohol among friends and are an essential community meeting place; notes the ideas put forward in the campaign for real ale’s Beer Drinkers and Pub Goers Charter which received support from 670 candidates at the last election, 150 of whom were elected; welcomes the genuine cross party consensus on the need to support and protect well-run community pubs; and so urges the government to implement a package of policies which will help secure the future of viable and well-run community pubs”.
Early signals from the government looked promising, with the localism bill proposing a community right to buy if local community assets, including its pub, were closing. But, as so often, the devil was in the detail and the reality is somewhat different to the rhetoric. In fact, as Caroline Flint said in the House in January:
“There is no right of first refusal, there is no right to a fair price, and there is no help for communities seeking to save local assets that the secretary of state’s cuts threaten with closure”.
And the author of EDM 210, Lib Dem MP Greg Mulholland, also questioned the substance of the so called “community right to buy” contained in the bill:
“We are not currently talking about a community right to buy,” he said. “Let us be honest: what we are talking about is a community right to try – to try to buy a pub and put it together. Once a community has a realistic and fully backed bid at market value, the owner has no obligation to sell it to the community”.
So here is an issue that affects 15 million pub goers; that affects thousands of communities across country and that involves tens of thousands of jobs. It is an issue that goes to the heart of the way that the cost of living is influencing the quality of life for people on low and middle incomes. And it an issue that shows the difference between the rhetoric and reality of the government’s big society approach. And the Labour party is all but silent.
Close a library and the party protests. Close a community centre and the party is outraged. But close a pub that costs the taxpayer nothing and generates tax revenues – and not a whimper is heard.
During the coming holiday weekend, hundreds of thousands of people will enjoy a visit to the pub. And yet slowly but surely the pub, a vital part of our cultural heritage and a key community asset, is being squeezed out of existence. Remember The Tatnam – my Dad is turning in his grave.
Peter Watt was general secretary of the Labour party.
Tags: Caroline Flint, EDM 210, Greg Mulholand, Peter Watt, pubs
This is hardly joined-up thinking. The past fifteen years have seen a substantial stoking of property values, based on cheap money — low mortgage rates will increase the cash value of land. Given most pub chains own their buildings outright as an inheritance from the past, every time interest rates drop, land values increase, and the opportunity cost of keeping something running as a business relative to selling it for development increases. Moreover, the past fifteen years have seen, under the rubric of “public health” a massive increase in pressure on people to drink less, large increases in the price of alcohol, and a casual assumption that banning smoking in pubs would result in an influx of people who previously didn’t go there; which, of course, didn’t happen. In most cities licensing for other forms of drinking establishments, mostly high-capacity vertical ones, was loosened, and given a freedom of action over opening hours that family-run pubs couldn’t follow. To now complain that a last-ditch measure to rescue failed pubs is a substitute for a lack of policy over the past decade or more seems a trifle disingenuous.
Let’s face; community-owned pubs are a fantasy of middle-aged businessmen, who might run one in the way that they fund their wife’s little hobby of running a cafe, or instead of restoring an old Triumph Spitfire. Purchasing a pub, even at “gone concern” prices, which is sat on land capable of development is a massive financial commitment. Even if the pub itself is sufficient security for its own purchase (which is unlikely: the land is probably worth more with the building cleared and is priced at that level, so the security is complicated by the cost of clearing the land) the revenue stream from a pub is uncertain at best. People may love their community pub, but they are hardly going to mortgage their own houses to support it, and the sort of pubs that are closing probably don’t even have that potential source of working capital.
There have been some recent changes that make running pubs slightly more appealing: for example, the reduction in duty on beer brewed on the premises gets some margins back into the equation. But at the moment, owing to savage taxation on alcohol, VAT on hot food and employer liabilities it’s almost impossible to run a pub — even as a full time family business — and repay the purchase price. I have friends who have bought a pub, but they did so with the profits from selling three properties, and therefore have little debt: this is not a scalable model.
Great post Peter, couldn’t agree more. In my village we have a fantastic local pub. The Unicorn is run by Jimmy a talented young guy in his mid 20s who started as the chef and then took over. He’s doing everything possible to make it work with great ‘pub cooked’ food – none of the rubbish frozen junk food you get in even posh chain/theme pubs. He does his own promotions and gets involved in the local community. He’s playing a big part in the Royal wedding party in the village, which despite being a Republican I’ll be going to – to support the community and Jimmy. He’s doing a big push on Sunday lunches and has roped in friends and family to dress up in costumes and stand on the main road to try and get cars to divert into the village. He’s tried Polish evening for the local agricultural workers. He does open mic nights. He’s trying as hard as he can, but the odds are against him. Not just what you talk about, but also the fierce competition from the chain pubs that serve rubbish but promote it to gullible fools.
Top stuff.
Bars playing hard rock and metal music have shrunk to a depressingly small number too. And as a result, they’re overcrowded. There’s literally nowhere else to go to listen to Guns, Aerosmith or Zeppelin. It makes the baby jesus cry.
Livy
The big cultural switch seems to be that drinkers are buying their alcohol at the supermarket and chugging it at home, rather than venturing out into the pub. The government ought to consider whether this is what it wants, and also how its policies are causing this change.
There are 2 taxes on alcohol: duty and VAT. Duties are an absolute tax in which the same amount paid no matter how the alcohol is retailed. VAT is a relative tax meaning more is charged as the price increases. Pubs have a much higher cost of sale than supermarkets, which means they pay higher VAT.
Now VAT is a pretty rubbish tax, but one thing it is good at is encouraging efficient prices. However is this really what we want for alcohol? I don’t think so. The govt should through its taxation policy should encourage responsible drinking, rather than cheap drinking.
Charging VAT on alcohol creates a significant part of the price differential between supermarkets and pubs. The solution is a tax switch from VAT to duty, so that the tax on alcohol reflects the social cost rather than the supply cost.
So I advocate making alcohol VAT exempt, but increasing duty to offset this so it is revenue neutral for the Treasury. This would help pubs at the expense of supermarkets, and help bring about a more social attitude towards drinking that we have at the moment.
Home drinking is generally less social than pub drinking, and as the coroner of Greater Norfolk said earlier this week it is having a detrimental impact on health too. Pub drinking brings with it the community benefits mentioned in this article.