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!
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?