The industry has a new friend in a very high place. Fresh from scrapping the beer duty escalator and cutting beer duty by 1p, George Osborne could almost have been forgiven for using last week’s meeting with industry leaders as a lap of honour - a good photo opportunity with a grateful sector.
But speaking to journalists before the meeting, the Chancellor said the duty cut is “just the beginning of helping this industry”.
“What I want to talk to the industry about now… is what we can do to help young people get employed in the industry, what we can do support British agriculture, which is where it all starts, [and] what we can do with the pub industry, which is where it ends, where the product is sold,” he said.
“I see it as an important step forward, what was announced in the Budget, but not the last word.”
Supping halves of Pedigree during the 20-minute meeting at Marston’s brewery visitor centre in Burton, the dozen-or-so-strong group of pub operators, brewers and industry lobbyists set out areas of concern that they’d like the Chancellor to address. That list was broad and included the burden of planning rules, continuing problems of accessing finance, progressive beer duty and the proposed statutory code for the pubco/tenant relationship.
There were no firm policy or taxation commitments from Osborne – the Chancellor had earlier refused to comment on a possible VAT cut for the sector – but there appeared to be a genuine desire to listen. He agreed to meet again with the group on a regular basis, just as he meets supermarkets a few times a year for a state-of-the nation catch up. For its part, the group agreed to report back on how the recent beer duty reduction is being used by the industry to stimulate growth in the economy and create jobs.
“We’ve got an open door now, a very supportive Chancellor,” enthused David Wilson, the British Beer & Pub Association’s director of public affairs, after the meeting. “The onus on us is to show we’ve stayed united and played our part in economic growth.”
Kate Nicholls, strategic affairs director at the Association of Licensed Multiple Retailers, added: “We are pleased the Chancellor recognised that very real growth potential and the value of backing and supporting a sector which is a lightening rod for assessing consumer confidence, and the health of local communities and high streets - we want to meet with him regularly to help him do that going forward.”
Industry leaders certainly left the meeting in upbeat mood, but what caused the Chancellor to make such gestures to the trade now, and how can we trust he’ll follow them through with his promises?
To answer the first question, political expediency undoubtedly played a big part. It’s difficult to over-estimate how much the Government, and Osborne in particular, was bruised by the backlash from last year’s Budget. Tax cuts for millionaires, a levy on static caravans and the ‘pasty tax’ created the image of a Chancellor out of touch with normal people. A repeat of such negative headlines could have signaled the end of Osborne’s reign at Number 11.
One industry figure suggested that a change of tact might have come from the appointment of Lynton Crosby, the straight-talking Australian political strategist, as the Conservative’s campaign director last November. Crosby’s mantra, it’s believed, is that you don’t win elections by putting up prices of simple luxuries for the common man.
While this may explain the action on beer duty – and, it’s rumoured, the decision to drop plans for a minimum price of alcohol – red-top newspapers gave extra impetus for more wide-ranging support through their ‘save the pub’ campaigns in the run up to the Budget. Almost every week stories in the Mirror and the Sun highlighted the rate of closures and the burden pubs are under. It was a relatively easy win, politically, for Osborne to confirm his commitment to the industry and receive some goodwill among a major sector – goodwill that’s increasingly hard to come by amid public sector cutbacks and sluggish economic growth.
Talking of which, the economic issue case was, if anything, even more crucial. Here the industry can take great credit for conducting a unified and focused campaign based on sound fiscal logic rather than emotional sound bites. By emplacing its role as a job creator, the trade has successfully rebranded itself as an industry worthy of special attention, one that can help fill the void of public sector job losses.
As Osborne said himself: “I think what convinced me [to reduce beer duty] was the economic argument and the fact that it was having an impact on jobs and on pub closures, and that is not what we want our tax system to be doing.
“I thought this was a very straight forward way to help a very important industry that employs a lot of people.”
Leading figures from the industry's Perceptions Group, which has committed to providing work placements for 15,000 young people across the sector, were represented at the meeting in the form of Beds and Bars managing director Keith Knowles and Yummy pubco director Anthony Pender. During the session, Spirit Pub Company chief executive Mike Tye called for action to help the firm take on more apprentices. The message to Osborne was clear: this is an industry that’s serious about job creation, and can do even more with a helping hand from Government.
So has the pub and beer industry finally got a politician with proper power as its champion in Government, or could this be another false dawn? Politicians love to make the right noises towards the sector; eyebrows were raised a few years back when Cameron declared that his would be a “pub-friendly” Government.
What’s different here is that Osborne has supported his words with direct and meaningful action, at a time when the sector has shown it can finally speak with one voice. It must ensure it continues to do so, and not become torn apart by in-fighting over the pubco/tenant relationship, progressive beer duty, minimum pricing or other issues that have divided the sector in the past.
Only time will tell whether ‘Boy George’ will make good on his promise to give more help to the sector. But for the time being at least, it’s fair to say the ‘Boy done good’ – and, frankly, so have we.
