3 ways Labour could help your local pub

12th November, 2013 8:17 pm

Under Ed Miliband Labour is the Party of small business. Our pledges to freeze energy bills and cut business rates will put money back into the pockets of our small firms and allow them to invest in the jobs and products of the future. Ed has also been clear that where markets demonstrate uncompetitive or restrictive practices Labour will intervene to make these markets fairer for businesses and consumers.

One market where small entrepreneurs particularly need such support is the pubs sector.

Every Briton instinctively knows the value of pubs as community assets. Each pub employs on average ten people, often young people or women who are particularly struggling in the current jobs market. When a pub closes – and 26 close each week – its community loses a focal point for engagement and the local economy loses £80,000 a year of value.

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The evidence that pubs are struggling is clear. Changing life styles, the growth of ‘preloading’ and a country feeling the pinch are all factors in this. Taxation – whether it be beer duty, VAT (the increase to 20% has actually added more to the price of a pint since 2010), or the increase of a Machine Games Duty – also has an influence.

I completed a large scale survey of landlords in my constituency of Chesterfield. The results back up these national trends. 96% of local pubs have seen a drop in profits last year, but crucially tied and managed pubs saw their profits drop to a greater degree than free-houses. It is this final factor which we can do most to address from opposition.

The BIS Select Committee has produced four reports in recent years all of which call for a fairer and more balanced relationship between “PubCos” – the large branded pub chains which own the vast majority of British boozers – and their licences.

These demands are backed up by coalition of groups diverse enough to include the GMB union and the Forum of Private Business.

I have backed these demands since I became the Shadow Pubs Minister. In January I was proud to lead the very first opposition debate of the year on the subject of pub regulation. It was a great success as within 24 hours of the debate the government caved into our demands and agreed to consult on new statutory regulation to rebalance risk and reward in the pub industry.

We want to work with the government to get these much needed changes through and have set three tests for the new code:

1. The Beer Tie, whereby landlords can only buy products from their PubCo, works for some licences. However, for many others it means they can only buy limited products at inflated prices. We want every landlord to have the choice of whether to go free-of-tie. This would allow licencees to operate in a re-constructed market which would actually be more competitive.

2. When a new licencee takes over a pub, or when an existing rent contract expires and is renegotiated, there should be a fully transparent and independent rent review completed by a qualified surveyor.

3. There must be a truly independent body to monitor the regulations and adjudicate in disputes between licencees and pubcos.

Labour’s approach to pubs is truly grounded in the principles of building a market that works, with rules to prevent restrictive practices and big companies unfairly using their size in an uncompetitive way.

However, even if our three tests are all met before 2015, there will still be work for an incoming Labour Government to support pubs.

To pick a prime example, we must find a more appropriate balance between the on and off trade as two thirds of publicans in my Chesterfield survey, identified cheap supermarket alcohol as damaging their business. I am examining how other countries, including Ireland, have looked to address these imbalances.

Of course, the biggest thing we can do for pubs is to address David Cameron’s cost of living crisis. When people are feeling the pinch they decide to stay in and watch their favourite soap rather than head to their local. That is exactly the mission our next One Nation Labour government will be setting itself.

Toby Perkins is the Shadow Pubs Minister

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