My week in blogs on Lib Dem Voice: beer, biodiversity and big railways

These days, I edit and write for Liberal Democrat Voice, formally as Friday editor and but also at other times as news breaks or topics need to be discussed.

This week has been typically busy, with zombie pubcos and vampire railways in the frame, as well as the vital issue of biodiversity offsetting.

First up was an attack on the pubcos. These are the companies that took over large number of pubs in the 1990s. Lib Dem MP Greg Mulholland raised the issue in a hard hitting speech in the Commons on Monday night and I reflected:

QUOTE: Four years ago, I cried when the tenants of my local were forced out by a pubco. They’d had a brilliant first year. They’d made the pub a hub for the local folk scene and helped breathe new life into the community. But on New Year’s Day, their rent doubled. That was the price the pubco levied on their success, and it was an impossible demand. The pubco accountants cared not. The pub has struggled ever since. It’s up for sale, facing closure.

Read: Casked Crusader battles zombie enterprises over “Great British Pubco Scam”.

On Friday, I tackled the seemingly obscure topic of biodiversity offsetting. Owen Paterson, MP for North Shropshire and the man at the helm of the Department for Environment, Food and Rural Affairs is an enthusiast for the scheme. The basic idea is to give the green light to developers who wish to build on wildlife rich landscapes, providing they pay for, or contribute to, a biodiversity scheme elsewhere. The proposal worries me:

QUOTE: It’s  the lichen, the mosses, the liverworts, the beasties too numerous to mention and too small to see, as well as soaring trees, lush grassland and boggy ponds that give a patch of land its distinctive biodiversity signature. And this cannot be established in weeks or years, sometimes even decades.

QUOTE: And therein lies a danger. Few land managers, whether nature trusts, councils or farmers will want to be tied to century long schemes. We live in an age of short-termism and no one is going to tie themselves down to manage a bit of land for 100 years.

Read: Nature can’t be shuffled around like politicians or for profit.

Saturday saw me writing on the vexed question of High Speed 2. The BBC reported that a recent report boasting the benefits of the scheme failed to mention that wide swathes of the country will lose out economically as the rail line sucks investment into major cities. (It’s worth noting that Shropshire is predicted to be a net beneficiary.) HS2 always generates a lively debate and my post is no exception.

Read: Vampire railway: High Speed 2 to suck life out of local economies.

My other Lib Dem Voice blogs this week:

Wednesday: Employment: Jobs are growing – but there is a long way to go.

Friday: Jeremy Browne talks to the Times on his sacking and not being a Tory.

Friday: Caron Lindsay defends Jo Swinson’s right to stand.

More by Andy Boddington on Lib Dem Voice.

Scrapping the beer duty escalator is good news for Shropshire’s economy

Among the tangle of announcements in Wednesday’s Budget was a statement to cheer the heart of real ale drinkers everywhere. As the Chancellor announced it:

“We will now scrap the beer duty escalator altogether. And instead of the 3p rise in beer duty tax planned for this year I am cancelling it altogether. That’s the freeze people have been campaigning for. But I’m going to go one step further and I am going to cut beer duty by 1p. We’re taking a penny off a pint. The cut will take effect this Sunday night and I expect it to be passed on in full to customers.”

George Osborne is of course entirely naïve in believing that a one penny cut in the price of a £3 pint will be passed on to the customers. How do you make a 1p cut to a commodity priced in 10p units? But expecting that level of reality from a Chancellor of Exchequer these days is perhaps far too much.

Beer is so important here in Shropshire. Around 4,800 are employed in our 651 pubs, and many more in our 18 breweries. They underpin much of the tourist industry – not only by serving food and drink, but by providing a place where tourists can meet local people. Tourists chip in around £50 million a month to our local economy, supporting nearly 16,000 jobs. This is no small beer in a county with a population smaller than that of Southampton.

Church Inn, Ludlow
The Church Inn, Ludlow

We were in danger of pricing beer out of the pockets of both locals and tourists by the stupid beer escalator.

The Labour government of old was unduly fond of such price and tax escalators, which generally take the form of retail price index plus a bit more. I have always regarded this as a rather odd fiscal mechanism because it simply creates a circularity that feeds itself. Costs go up, the RPI duly rises, and costs go up again as a result.

It beats me why the coalition has decided to maintain this blunt policy (it applies to trains and water, for example). Fiscal escalators might be acceptable in times of plenty, but as the economy bounces in and out of recession the circularity begins to consume itself. If prices are raised when money and credit is scarce, people buy less. Businesses are undermined by struggling sales and rising costs. Tax revenues fall and welfare payments rise. People buy less, and the circularity spirals downwards.

This brings us back to beer. The escalator adds 2% plus inflation to beer duty. There has been a 42% increase in duty in just four years and tax is now around one-third of the price of pint. The result is that beer sales are falling and pubs are closing.

Now the beer escalator has been abolished. This will not save all our pubs – but it will give them a fighting chance. And that one penny a pint cut in duty will be added to the margins of the beer trade, strengthening its balance sheets.

We’ll still be ripped off in some pubs. But if we chose a good local, selling great local food and fantastic Shropshire beer, we’ll not go far wrong.

Now George Osborne and Danny Alexander. You have got beer duty right at last. Is there any chance of you fixing the economy so that we can celebrate with a pint or two?

#Cheers

This text is partly based on my earlier article on Lib Dem Voice calling for the beer duty escalator to be scrapped.

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Last blog: Shropshire Council’s Sunday parking charges on trial in Ludlow

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Raising a glass to the pub adjudicator and the great British pub

Struggling publicans will soon be able to appeal to independent adjudicator Vince Cable, Lib Dem Business Secretary announced yesterday. I’ll raise a glass to that!

ab_pint

Pubs are at the heart of British life. They are infinitely varied, unlike the monotonous American style cafés that are invading our cities and even our small towns. Sitting in a Starbucks or Costa, you could be anywhere in the world.

That’s not the case with the great British pub. Each bar is a unique experience. Landlords, landladies and managers up and down the land (mostly) serve beer to perfection. They dish out excellent food. They charm and entertain their customers, politely showing them door when they have outstayed their welcome. Pubs are at the heart of communities, especially in our villages where they are often the only service remaining. The humble pub sign was even voted the number one icon of England in a 2008 poll conducted by the Campaign to Protect Rural England.

But this idyllic view of the great British pub gets further from reality with every year that passes. Too many pubs are struggling, and eighteen a week are closing. There are a whole host of reasons why pubs are in difficulty, but there are only two interventions that the government can easily make to help them.

The intervention the Coalition is now making will ensure fair play between publicans and the pubcos that own so many pubs. The problem goes back to the 1989 beer orders, which aimed break up the dominance of a handful of major breweries and introduce greater competition. The measure succeeded in reversing the growing stranglehold of groups such as Watney Mann, but it also led to the rise of the pubcos. These companies have bought and traded pubs like bags of malted barley, and most have shown little interest in the community role of pubs. By insisting that publicans buy a limited range of beer at fixed prices and by ramping up rents just as a pub begins to make a profit, they have driven publicans to ruin and pubs to closure.

Vince Cable is proposing to bring in a statutory code to define the relationship between large pub companies and publicans. It will ensure a level playing field by decreeing that a licensee tied to a pubco should be no worse off than a free-of-tie-licensee. That means fair charges for beer and fair rents. The code will be enforced by the new Adjudicator.

The details of the scheme will be thrashed out in consultation with the industry and there is hope that legislation can be passed within the next year. It will not be a moment too soon.

There is a second intervention the government could make very quickly. The beer tax escalator automatically increases the duty on beer by 2 per cent above inflation every year. Abolish this and beer would quickly become more affordable. There’s a budget coming up, so how about capping beer duty to ensure that the great British pub recovers and thrives?

The escalator that’s pricing beer into insensibility

On Wednesday upward of a thousand enthusiasts descended on Westminster to demand protection for one of the nation’s great heritage assets. Beer.

The Labour government of old was unduly fond of price and tax escalators, which generally take the form of retail price index plus a bit more. I have always regarded this as a rather odd fiscal mechanism because it simply creates a circularity that feeds itself. Costs go up, the RPI duly rises, and costs go up again as a result.

It beats me why the coalition has decided to maintain this blunt policy. Fiscal escalators might be acceptable in times of plenty, but as the economy bounces in and out of recession the circularity begins to consume itself. If prices are raised when money and credit is scarce, people buy less. Businesses are undermined by struggling sales and rising costs. Tax revenues fall and welfare payments rise. People buy less, and the circularity spirals downwards.

This brings us back to beer. The escalator adds 2% plus inflation to beer duty. There has been a 42% increase in duty in just four years and tax is now around one-third of the price of pint. The result is that beer sales are falling and pubs are closing.

Local beers are the vernacular within the international gastronomic landscape of Britain. Britain has a unique landscape of local beers that should be celebrated by the government, not undermined by crude taxation mechanisms. It has a unique network of pubs, many still individual and idiosyncratic in a world dominated by national and international branding. They deserve a chance of survival.

Beer is an indispensable part of the economy of rural areas. Here in Shropshire, around 4,800 are employed in our 651 pubs, and many more in our 18 breweries. They underpin much of the tourist industry – not only by serving food and drink, but by providing a place where tourists can meet local people. Tourists chip in around £50 million a month to our local economy, supporting nearly 16,000 jobs. This is no small beer in a county with a population smaller than that of Southampton.

If beer is priced out of pocket for locals and for tourists, our small breweries will go out of business. The country will once again become swamped with unified brands. The Ghost of Watneys Red Barrel will be resurrected to stalk the land. Pubs, which are often the only social centre in rural communities, will close forever.

The government has seen sense by cancelling the next fuel duty escalator rise. It is time for it to see sense over beer.

This article was first published on Lib Dem Voice on 12 December.