Behind the photos of happy people with pints is an industry in trouble

Dr Liz Hind

Like many pubs, it was simply not viable to open my pub with outside space only during a wet, British April. But we are now back. We’re having to do twice the work for half the customers, but it was good to see old friends again, human and canine. We can’t party yet, however. Behind the jolly photos of people with pints is an industry in trouble – and it’s no wonder that we are angry.

Over a year ago, we were told that we would be supported – “whatever it takes” – and for a while we believed it. We took on debt, we put staff on furlough, we organised food deliveries to the homeless. We had a year of trying to keep up with ever changing rules and satisfying nobody. It’s been a no-win situation where we can’t afford to stay closed, but we are branded irresponsible for opening, and it’s not going away any time soon. Delays to the June 21st full opening will put more people under pressure and more businesses will go under as the business support is definitely based on dates not data.

Even with drinking allowed inside, many pubs will struggle to make a profit with reduced capacity and reduced consumer confidence. It is an anxious wait to see whether businesses that are already deep in debt will be able to weather the next few months, and it has been made clear that we will receive no more grant funding, only more opportunities to take on debt. Pubs will need to have a better year than normal to make some money and also pay back liabilities such as deferred tax and rent debt. I will be handing over a third of my ‘restart’ grant back to HMRC for deferred VAT before I can make some money in June – if restrictions lift further.

We are, of course, kicking ourselves that we didn’t think to save our businesses by being Matt Hancock’s landlord, or by texting Rishi Sunak or Boris Johnson. Businesses with connections have managed to do alright for themselves, while others really struggled to have their issues heard. Engaging with a trade body is no guarantee that you have the full story, as there will be competing interests and disputes in any industry.

The issue of rent debt and rent renegotiation is one that has the potential to push even more pub owners into crisis. We are currently operating under a voluntary code of practice that has pitted individual tenants against large, well-resourced companies. There is little oversight of how much money is owed, to whom and where grants given out by the government ultimately end up.

Existing power imbalances within the industry between pub tenants and pub companies will cause many people to lose their savings and their homes unless there is a concerted effort to address the problem. This must include the right of tenants to have an independent, collective voice in the way forward, rather than relying on trade organisations whose method of funding is unclear but does include funding from the companies with whom tenants are having to negotiate. This is causing all kinds of issues, such as tenants who have exercised their legal right to break from tied prices on beer being openly treated differently by the pub owning business.

The recovery of the pub and hospitality industry is far from certain. Even if the short-term issue of consumer confidence is overcome, we will still need support for the long term and to make the tax burden placed on different businesses fairer. There needs to be parity between not just online and off-line businesses but also between the on-licence and off-licence trade, as supermarkets should not have an advantage over a publican. Business rates, VAT, alcohol duty all need to be examined to ensure parity between different businesses.

More importantly, we need access to good data and a deep understanding of all the issues. There is an infuriating lack of knowledge shown over basics, such as how much it costs to run a pub. Sunak claimed on the BBC’s Andrew Marr Show that the average pub rent is between £14,000 and £20,000 per annum. Nobody knows where he got this figure from. Data from 2017 shows that rent is at least double that figure and many times that in London. While the exact toll on the industry is yet to be known, nearly 10,000 pubs were lost in 2020 and hundreds of thousands of jobs. Communities have lost assets that are important to the foundational economy and social cohesion.

Livelihoods have been devastated and the recovery will be difficult, but whenever I write on how dire it is for pubs, I remember that wedding, music and business event venues, nightclubs and conference centres as well as many in mass events will have been legally closed without revenue since March last year. They all struggle to be heard. People who have hung on for the last year and not thrown in the towel are going to need support to rebuild while also paying back debts accrued. We need a fair deal – not just a few socially distanced customers.

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