THE BUDGET
As it usually does, CAMRA asked its members to lobby their MPs in advance of the budget that was delivered on 30 October. CAMRA primarily wanted to see a reduction in alcohol duty to help pubs compete with supermarkets and the long promised review of the business rates system.
First, the good news. The duty on draught beer and cider intended for sale in pubs will be reduced by 1.7%. There was talk of ‘a penny off a pint’ but that did not take into account the effect of the other measures introduced. Alcohol duty on all other products will increase by the rate of inflation in February, expected to be 3.65%. Added to this are the increase in employer’s National Insurance contributions (ENIC) and the increase in the National Living Wage. These, of course, affect all businesses but, given the pub trade’s widespread use of part time staff, the changes to ENIC are particularly costly. Breweries are very unlikely to be able to pass on the reduction in duty because of these increases in their running costs. Price increases look to be inevitable at a time when many drinkers are already being priced out of the pub.
The news as regards business rates was not that good either. The long promised review will take place but any changes won’t come into force until 2026/2027. In the meantime, the 75% discount that hospitality businesses are currently receiving will, as from 1 April, be reduced to 40%, effectively a 35% increase.
At the beginning of November, UKHospitality organised a letter to the Chancellor of the Exchequer from over 100 hospitality businesses, including Fuller’s, Young’s and Wetherspoons, asking for a review of the ENIC proposals. There have also been meetings with Jonathan Reynolds, the business secretary. Following a survey of its members, the British Institute of Innkeeping (BII) has warned that one in four of independent pubs will close. Of the others, 75% will cut staff hours, 40% will reduce opening hours and a third will make staff redundant.
Recent closures and take-overs of both breweries and pubs have demonstrated that the effects of the Covid shutdowns and the ensuing cost of living crisis are still affecting both. Many have worked wonders to survive this long but there are limits and, in many cases, those limits have now been reached. It seems inevitable that the current rate of closures of both small independent breweries and pubs will increase.
As well as these major items, CAMRA will continue to campaign for the abolition of the restrictions on the sale of takeaway beer, a reduction in VAT for pubs and a review of the definition of cider for tax purposes to ensure that it includes only products that are at least 50% fresh juice.
BETTER NEWS
One piece of good news for the pub trade is that pub gardens and outdoor spaces have now been excluded from the Government’s new regulations on smoking and vaping. This is not a change of policy as such, simply an admission that the idea was unworkable.
The Chancellor also announced that there will be a review of the beer market with a view to helping independent breweries gain better access to the pub trade. Details are awaited and CAMRA will, of course, want to participate. That said, the European Union vertical block exemption regulation that underpins the operation of the tied house system is now part of UK law and is within the Government’s control.
NIGHT CZAR TO STAND DOWN
It has been announced that Amy Lamé is standing down as London ‘night czar’. She has held the position for eight years and feels that it is time to move on. She has had her successes but the post is limited by only having restricted powers, with licensing decisions remaining in the hands of borough councils. A London Nightlife Taskforce is being formed to review the continuation of the post and the working of the Night Time Enterprise Zones programme and the Women’s Night Safety Charter.
SURGE PRICING
A well known pub chain (not one known for providing cask beer) has introduced ‘surge pricing’ to one of its central London outlets. They are adding £2.00 to the price of a pint (keg) after 10pm, bringing the price to £9.40. Other products, including soft drinks, are also included. A tonic water goes up by £1.00 to £3.15. This does not apply in all of the chain’s outlets and the company says that it only applies in this particular branch because they have additional costs arising from conditions placed on their licence, including door security and plastic glasses. The main issue however is the lack of any warning for customers. There are menus but they do not include this information. Reportedly, all that was visible was an A4 sized sign at the end of the bar saying ‘We operate a variable price list in this venue’. I think that customers deserve better than that.