UK pubs: lobbying for change

Will this year be when pubs at last gain a place at the centre of the political agenda like that other great British institution the Post Office? Will there finally be a backlash on Beer Tax to mirror the various revolts we have seen on petrol tax? Will we lose another 3,000 pubs from our Green and Pleasant land or will the pace of closure quicken as recession bites with as many as 5,000 licensed premises shutting their doors for the last time? Above all I think the pub trade needs to articulate a positive agenda for change. In the run up to the General Election the political parties may be surprisingly responsive. Moreover, in the words of the Serenity Prayer, the industry needs the wisdom to accept the things it cannot change, the courage to change the things it can and the wisdom to know the difference. It is no good for example continuing to moan on about the smoking ban which is now a fixture of British life and, if we are honest, an overwhelmingly popular one. The pricing issue For me the outstanding problem by far is the differential pricing between the on-trade and the off-trade. Whereas 30 years ago the price of a pint in a pub was about double the price of an equivalent in a supermarket, now it can be seven or eight times more expensive. The basic reason why there is no consumer tax revolt is that it is very easy to purchase cheap alcohol legally at below-cost price. This is the issue which will dominate the politics of pubs and beer over the coming 12 months. There is a whole range of possible market interventions open to government. At one end of the spectrum the idea of market minimum pricing is beginning to gain momentum. The Scottish government seems determined to go down this route and the Home Affairs Select Committee in the UK parliament has produced a report supporting the idea which Jacqui Smith will have to respond to in these early weeks of 2009. An unlikely but potentially powerful coalition exists which broadly supports setting a minimum price. As well as some pubs and brewers this would include the Campaign for Real Ale (CAMRA), the British Medical Association (BMA) and some senior police officers. Nick Clegg has become the first party leader to signal his agreement. It is hard to see how there could be one price of beer in Berwick-upon-Tweed and another in Newcastle but if ministers baulk at minimum pricing a number of other options are available which may do something to combat the on/off-trade differential. For example, in Ireland discounting by volume is about to be outlawed. It will no longer be legal to sell 20 bottles or cans at less than the price equivalent to twenty multiplied by the price of one can. Ministers in Eire are also contemplating adopting the suggestion made by Ted Tuppen of Enterprise Inns that all price advertising should be banned outside licensed premises whether pubs or supermarkets. Taxing times Meanwhile the industry has a tactical decision to make as regards its campaign on the level and scope of alcohol taxation. It needs to bear in mind the old saying “Be careful what you wish for.” In the event that Alistair Darling decides to abandon the alcohol duty escalator which has been set for the next three years (and this is a big ask given the state of the government’s finances) this would not in itself close the differential one penny between on and off-trade prices. A more radical approach is required. The obverse of making beer more expensive in supermarkets is obviously to make it more affordable in pubs. The proposal of having a lower rate of duty for draught beer may be an idea whose time has come. The All-Party Parliamentary Beer Group will be examining the mechanics and legal implications of this with the European Commission as a priority. The principles of such a dual-rate of taxation are not entirely dissimilar from those implicit in the now well-established lower rate of duty for micro-brewers. In addition, 2009 could be the year when it is worth pushing for an extension of the rate relief scheme, which currently applies to some village pubs, to include all community pubs. Code of conduct Having torn up the voluntary code of practice because of fear of infringing competition law, the industry now feels that it could be made subject to a statutory code of conduct, which might demonstrate the worst features of the nanny state. My advice would be to develop a cool and rational critique of the proposals, which civil servants admit are still ‘work in progress’. It is sometimes easy to forget that well-planned industry lobbying can deliver results – as occurred with drink-driving in 2008. Rather than 26 pages of waffle the government should be encouraged to put down on one side of paper the practices which it considers should be banned to combat binge drinking. These could be simply added to national licensing guidelines and licensing conditions for individual premises under existing legislation. There would be widespread support for outlawing irresponsible promotions such as free drinks for women and entry fees that are linked with unlimited amounts of drinks. On the other hand the nonsense contained within some of the government’s draft suggestions must be ruthlessly exposed. For example one clause declares that “under no circumstances must drink be provided in such a way that the amount of alcohol cannot be measured by both serving staff and customer”. In other words pouring wine from a bottle into a glass in a restaurant would be banned. Equally, would it really add to the sum of human happiness if every licensed business has to meet with the police and licensing authorities twice a year as the draft code suggests? That’s 400,000 meetings a year. Finally pubs up and down the land will be taking a greater than usual interest in the summer of 2009 in the proceedings of the European Court of Justice in Luxembourg. Should the Court find that it is perfectly legal for publicans to show Greek TV coverage of Premier League football matches, there will be rejoicing in the streets. John Grogan is MP for Selby and chair of the All Party Parliamentary Beer Group. This article is published in M&C Report’s forthcoming guide to the Pub, Bar and Nightclub industry. For more information please contact Charlotte Feenan on 01293 846578