News and Views – November 2020

SMALL BREWERIES’ RELIEF SCHEME CAMPAIGN

The campaign against the Government’s proposed changes continues. The petition is half way to securing a debate in Parliament. It is open until 10 February 2021 and can be found here.

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An adjournment debate on the SBR proposals was called by Liz Saville-Roberts, the MP for Dwyfor Meirionnydd, and this was held on 9 November. This was not linked to the petition but, although adjournment debates have a limited scope, it helped to keep the subject ‘live’, which is useful because the petition debate might not come until the New Year. The Society of Independent Brewers (SIBA) asked their members to contact their MPs to encourage them to attend.

Given that it was held late on a November Monday night, a creditable 15 MPs spoke in the 45 minute debate. They came from all parties and parts of the UK and all of them mentioned breweries in their constituencies of which they were proud. Elliot Colburn (Carshalton and Wallington) praised both Anspach & Hobday and Signal Brewery but this was London’s only mention. Craig Mackinlay (South Thanet) said, “I think we would all salute the great work of CAMRA— the Campaign for Real Ale—and other organisations that have promoted this huge variety of very local, very flavoursome, fantastic ales that we would not otherwise have had.”

No-one spoke in favour of the proposed changes. The response came from Kemi Badenoch, the Exchequer Secretary to the Treasury, who commented, to quote from Hansard, “The layperson may therefore wonder: if the relief is seemingly so effective, why are the Government reviewing it? The answer is simple: because the industry asked us to. As hon. Members may be aware, small breweries relief is not uniformly popular in the brewing sector.” She went on to say that the problems that were mentioned, “will be addressed in the technical consultation. We must remember that this measure is not coming in until 2022, so there will be time. We will publish more information about the evidence that we have received as part of our upcoming consultation, which will be towards the end of the year.” The last word must go to Nigel Evans, the Deputy Speaker, who said, “If it were not for COVID, I know exactly where most of us would be heading now. I hope that the good news that came from Pfizer today will give us cause for a lot of celebrations when the pubs reopen throughout the whole of the United Kingdom.” Hear Hear!

If you would like to read the full coverage, go to Hansard Online – Parliament

LATE NIGHT LEVY

I have mentioned the current situation regarding the Late Night Levy before, but now it is becoming farcical. Camden Council have invoiced for the charge, despite pubs having had to close two hours before the levy should apply. The council’s view is that the legislation is still in force, so that they have no option but to charge. The Home Office advice is that local authorities should exercise their judgement. The council responded that local authorities do not have the legal powers to suspend or vary the LNL and the correct procedure would be for the Government to give them those powers and not just leave them to charge the LNL but not collect it, especially as the 10pm curfew was Government policy. UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping have all written to the Crime and Policing Minister, Kit Malthouse, demanding that he give local authorities the necessary powers. They are also seeking refunds for payments already made which cover any period when a business subject to the LNL was closed or unable to operate as a late night business.

ALCOHOL TAXATION

As I have mentioned before, from 1 January 2021, the UK will have complete control of how it taxes alcohol. A review has been in the offing for some time and now the Treasury and HM Revenue & Customs have launched their public consultation. CAMRA sees this as an opportunity to protect pubs, not least in terms of competition with supermarkets. In particular, CAMRA wants to see a lower rate of duty charged on draught beer. This has not previously been possible under European Union rules. Nik Antona, CAMRA’s National Chairman, explained, “Targeted action to reduce the price of a pint specifically for pub-goers would give community pubs a fighting chance to stay open, alive and thriving in the months and years ahead. The UK has one of the highest rates beer duty in Europe. As a result, publicans have been faced for many years with the unfortunate choice of either raising prices or closing their doors. This has only been exacerbated by the COVID-19 crisis, which has further eroded dwindling profit margins. A preferential rate of duty on draught beer would be a real step towards supporting and encouraging drinking in the supervised, community setting of the local pub. It would also create and sustain local jobs and level the playing field between pubs and cheap supermarket alcohol – helping our locals at a time when they need it most.

It is also now open to the Government to change the rules for VAT. In July the rate of VAT for ‘food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs’ was reduced to 5%. This was originally due to end on 12 January but has since been extended to 31 March. A number of trade bodies are lobbying for this to be made permanent, again, to ‘level the playing field’ with supermarkets.

BUSINESS RATES

There have been problems with business rates charged on pubs for some time. The Government set up a review in July with consultation closing on 31 October 2020. COVID has brought the situation to a head. Back in February there was concern that the process of appealing to the Valuation Office against a rateable value assessment under the ‘Check, Challenge, Appeal’ system took a minimum of 18 months and appeals have trebled this year as reductions are sought because of the effects of COVID on trade. At present, business rates on retail, hospitality and leisure businesses (including pubs) have been waived for the year 2020/2021 but the Government plans for them to become payable again from 1 April, based on 2019/2020 valuations. There have been calls for this ‘holiday’ to continue for 2021/2022, coming from the likes of CAMRA, the Mayor of London and the British Beer & Pub Association (BBPA), so as to avoid pubs being presented with bills that could be the final straw. In submitting their evidence, the BBPA’s chief executive, Emma McClarkin, said, “A fair and sustainable business rates system is critical to support our sector both now and into a strong recovery. Pubs overpay on business rates by some £500 million. Given the current circumstances they find themselves in over COVID-19, and the fact they are a vital community hub, it is simply not right or fair.” Interestingly, the BBPA have also proposed a digital sales tax so that companies that operate primarily or exclusively on-line pay their fair share in tax and ‘level the playing field with bricks and mortar-based businesses’. It should be remembered that small brewers also have difficulties with business rates, not having been included in the ‘holiday’ provision.

WHAT IS A PUB WORTH?

There was a worrying report in CAMRA’s monthly newspaper, What’s Brewing, for November. Pubs are valued on the basis of their profitability and this has, of course, been seriously affected by recent events. Pubs and bars are currently going on sale for up to 20% less than their asking price a year ago. A representative of one of the main property agents in the hospitality market, Christie and Co, predicted that because pubs now have an increasing debt burden, with such items as loans to repay and deferred VAT falling due, the situation could get worse. The only possible advantage, and it is a small one, is that it might offer an easier way into the trade for newcomers than taking a pub company tenancy. It might also allow more community groups to purchase their local pub.

HIGH COURT VICTORY

Readers will recall that a number of insurance companies refused to pay out on claims made on business interruption policies in respect of losses caused by COVID. The Financial Conduct Authority (FCA) took a test case to the High Court and, happily the court found in favour of the majority of the policyholders. Although some policies of this type only covered physical damage to property, others covered closures caused by disease and legally enforceable closures or restrictions. Within the limits of their policy, many businesses can expect to be paid enough to put them in the financial position that they would have been in had the 105 day first lockdown never happened. It is not yet clear whether or not the insurance companies will appeal. It is possible that the case will go all the way to the Supreme

Court.

KEEPING THE LIGHTS ON

 This campaign (#KeepTheLightsOn) was created by Daisy Cooper, the MP for St Albans, who has long been very supportive of her local pubs. The idea was that, on 9 or 10 October, publicans should turn their lights on and off in the pattern of the Morse code signal for SOS (three short, three long, three short). The action was to be filmed for social media and posted with a message to their local MP to lobby the Treasury for a new comprehensive support package.

BY THE BY

As we approach the end of the year, I thought it worth mentioning a couple of events that didn’t happen in 2020.

                Firstly, there was the duty to protect. Acting on a Government election manifesto promise, the Home Office had started consulting on creating a legal requirement for operators of public spaces and venues to introduce counterterrorism measures. For pubs this would involve increasing their security levels, putting incident response plans in place and arranging training and exercises for staff on what to do during an attack. The consultation was ‘paused’ in April because of the COVID pandemic. Oddly enough, there are parallels between what this legislation would have introduced and the COVID regulations.

Secondly, there is the local licensing policy review. During 2020, the Government was expecting local councils in England to review their ‘Statement of Licensing Cumulative Impact’ policies. These cover the number and spread of premises licences granted and usually lead to the requirements being made more restrictive. Given that the effect of the COVID restrictions make it difficult to assess the situation, these reviews have been delayed. When they are eventually undertaken, the pub trade could look very different.

THE ROSCOE HEAD

Finally a piece of good news. I’ve mentioned this famous Liverpool pub several times as a case study in how unfair the tied house system can be. Happily, Carol Ross has persuaded New River Retail/Hawthorn Leisure to sell her the freehold of this Grade II listed Edwardian gem. It has been in her family for over 30 years and Carol took over from her mother in 1997. It is one of the five pubs that has been in all editions of the Good Beer Guide and can be found on page 307 of the 2021 version. It is worth a visit.

You can find up to date news posts from CAMRA London Region’s Twitter account at: https://www.london.camra.org.uk/.

News extra – as usual, here are the ‘almost too late’ bits.

Insurance case (see above): there has been an appeal and, through some procedure which I have to admit I don’t understand, it has bypassed the Court of Appeal and, on 16 November, went straight to the Supreme Count.

Revolution Bars (see page 30): the CVA, which needed at least 75% of the creditors to vote for it, was accepted on an 88% vote. It is still open to legal challenge for 28 days.

Mitchells & Butlers: best known (in the press anyway) for their Harvester, Toby Carvery, O’Neill’s and All Bar One chains, M&B have announced the closure of 20 of their 1,700 pubs. There will be redundancies, although no numbers were quoted. The company says that it will look to redeploy staff where possible. An M&B spokeswoman, as quoted on the This Is Money website, said, “As announced in September, M&B reopened the vast majority of its estate, approximately 95 per cent, after the first lockdown ended. The remaining sites have been under review on a case-bycase basis since, taking into account factors such as expected footfall and business layout. We have taken the difficult decision not to reopen some of these sites and are working with leaseholders on next steps.” Chief Executive Phil Urban said, “We believe we are well placed … to keep Mitchells & Butlers at the forefront of the eating and drinking-out market.” That suggests to me that wet-led pubs are the most likely to be closed.

10pm Curfew challenge: frustrated at not being given any proof as to the effectiveness of the 10pm curfew, the nightclub chain G-A-Y sought a judicial review. Their Chief Executive, Jeremy Joseph, told the Morning Advertiser, “It does the opposite of protecting people by pushing them onto the street at the same time. They are going from being safe inside venues with staggered closing times to unsafe on overcrowded streets and overloaded public transport”. The action was supported by the Night-Time Industries Association. Unfortunately, the application was refused but they are not giving up.

Congratulations: the Saffron Walden Community Pub Ltd (SWCP) has completed the purchase of the Railway Arms, one of the Essex town’s best known pubs. This former Good Beer Guide entry was closed by Charles Wells (as they were then) in 2017. It was listed as an Asset of Community Value the following year and when Wells put the pub on the market, SWCP launched a share purchase scheme which has proved successful. SWCP plan to extend the use of the pub as a base for a number of other community facilities. The only disappointing aspect is that the railway and the station closed in 1964. The nearest station is now Audley End, two miles away.

Last word: this goes to BrewDog. They are re-releasing their limited edition Barnard Castle Eye Test (a New England IPA at 5% ABV), brewed originally in May, with a new name, ‘Cummings and Goings’. Proceeds will, as before, go towards the cost of producing their hand sanitiser, which they supply free to the NHS, and towards health care charities.

Compiled by Tony Hedger