In my News and Views column I make reference to Harold Macmillan’s famous quote, ‘Events, dear boy, events’. I expect that the current Prime Minister now understands only too well what Macmillan meant. At the risk of stating the obvious, it is hard to believe that, in a dozen or so weeks, the world has been overtaken by a crisis of Biblical proportions.
A sense of perspective is therefore required. That said, those of us who love our pubs and the beer that they serve are entitled to look to the end of the crisis, which must come, to see what then will be left of the pub and brewery trade. The situation is very fluid, developing day-by-day. I had nearly completed this article when, on 20 March, the Prime Minister announced the compulsory closure of all pubs, and restaurants. A radical rewrite then ensued.
CAMRA, in partnership with the Society of Independent Brewers (SIBA) and the Crowdfunder fundraising website, had set up a campaign called Pulling Together with the aim of helping pubs, clubs, breweries, tap rooms and cider producers during these difficult times. This now becomes largely redundant, although in due course it might come into its own. The campaign also includes a Facebook group, Pulling Together for People, Pints & Pubs, to establish an online community. It can’t replace the pub but it can help keep like-minded people in touch. For more details, see here.
I’m sure that, denied access to the pub, most of us will want to have some beer at home. Please don’t buy from the big supermarkets. Try the tap rooms or on-line shops of our many small breweries.
So, where are we now? CAMRA National Chairman, Nik Antona’s comments on the Government’s original decision are worth noting, “Pubs are at the heart of many communities and often provide other vital services. The advice from the Government for people to avoid pubs will have a devastating effect on the pub and brewing industry, the many millions of people it employs and the huge contribution it makes to local and national economies. The lack of decisive instruction from the Government leaves pubs in a limbo where customers will abandon them, but they’ll be unable to claim insurance or other support to help them survive. The Government has not defined how long people should stay away from pubs, but be in no doubt, within a short time many pubs and breweries will close and never reopen to serve their communities. If the Government believes people should not go to pubs, it needs to show leadership by clearly telling pubs to close their doors and not unfairly leave it up to licensees to make an impossible decision. It needs to makes it clear for how long a period the enforced closure should last, and quickly deliver a package of support to see pubs and breweries through until they can again deliver the host of benefits pubs bring to the communities they serve. This should include, but not be limited to: extending business rate relief to all pubs, regardless of rateable value; deferring or forgiving VAT payments; covering staff salaries; allowing pubs to stay open if they provide other vital community services such as post office facilities; and helping pubs recover at the end of the crisis by introducing a differential rate of duty on draught beer served in pubs. We’d also call on pub companies to support their tenants by giving them a rent holiday during the crisis and particularly during any forced closure. Other suppliers such as sports TV providers could also demonstrate their support of the pub industry by giving a payment holiday.” That decision has now been taken. The large pub owning businesses (POBs) will no doubt survive, although I expect them to be quite ruthless with staff numbers. Tenanted and privately owned pubs are at most risk.
The closure decision was good news as regards insurance, although you had to have it in place to begin with. Ei Group tenants, for example, are obliged to join the Group’s policy but it does not cover ‘business interruption arising from notifiable diseases’. According to the Association of British Insurers, this is not a standard condition. The Chancellor of the Exchequer has acknowledged the problem and said that he would talk to the insurance industry. We will see…
The Chancellor offered some concessions on business rates in the budget and went further in measures he announced on 17 and 20 March. Pubs, in common with other businesses, will have their business rates for 2020/2021 waived. Originally this was only for pubs with a rateable value (RV) below £51,000 but this extended to all pubs three days later. In addition, the ‘Pub Discount’ would have been increased from £1,000 to £5,000 for those pubs with an RV below £100,000. Almost half of London’s pubs have RVs over £51,000 as against 23% of pubs elsewhere.
In any event, these measures do not help with current cash flow. The Government’s cash grants scheme might do so except that, again, only pubs with an RV of less than £51,000 qualify. Loans are also available but they are only interest-free for the first year. Nik Antona again, “Making loans to businesses with no money coming in and multiple overheads to meet through a period of no, or low trading, is simply kicking the can down the road.”
Allowing pubs to act as hot food takeaways would provide a useful source of income for them and might enable them to retain some staff. Beware however of the law of unintended consequences. Were a pub formally to lose its A4 (drinking establishment) use class through being legally reclassified A5 (hot food takeaway), then its hard won planning protection would be lost and further changes of use, or for that matter demolition, could take place without needing planning permission.
We should simply have it stated that hot food takeaway service can be considered ‘ancillary’ and enforcement against it should not be considered expedient during the pandemic so long as the fixtures and fittings and public bar that facilitate the A4 use are not demolished and so long as the ancillary service does not result in substantial harm to amenity.
Likewise, off-sales of alcohol can also be deemed ancillary and not requiring consent during this time. Pubs ought to have been allowed to stay open as off-licences, at least until they had cleared out their stock. I hate to think how much good beer will have gone down the drain.
There will, of course, be more in the June/July edition. I haven’t got much else to do…