George Osborne received a ‘manifesto’ for the pub industry from three industry CEOs when he visited Banks’s Brewery on Monday.
Ralph Findlay of Marston’s, Alistair Darby of Mitchells & Butlers and Mike Tye of Spirit Pub Company told the Chancellor of their hopes for: help with jobs and growth; reductions in the cost of doing business; and cuts in red tape.
Findlay told M&C Report: “He spent the best part of one-and-a-half hours with us. And we tried to strike a balance between welcoming those government policies and decisions that are positive for our businesses, and setting out things we’d like to see changed.”
Jobs and growth
He said that he believes the government “gets” pubs, and the relationship between levels of taxation on the sector and job creation. “We told the Chancellor that we employ 65,000 people between us and that in 2014 we are planning £265m of investment. This is not a sunset industry, it is in growth. And the fact that the economic climate is getting better is contributing to increased confidence in making those investment decisions.
“We also talked about apprenticeships. Our three companies have 4,000 live apprenticeships, and we support what the government has been doing in this area. We told the Chancellor that as 50% of the people we employ are under 25, it would be very positive if the government would extend apprenticeship reliefs for under 21-year-olds to under 25s. He noted that.
“And we discussed the national minimum wage, saying we support the principle of increasing pay ahead of inflation for our lowest paid employees. But we asked to be able to work with the government to ensure that this transition is managed in an affordable way.”
Cost of doing business
On reductions in the cost of doing business, Findlay, Darby and Tye addressed business rates, arguing that the current situation penalises bricks and mortar businesses versus online businesses. While they conceded that there had been some positive steps for pubs in terms of rates relief, they made “a case for a rethink on how business rates work”.
Findlay added: “We’ve seen beer duty cut in the last two Budgets, and made the point that our relationship with the government, which was previously characterised by legislation and tax rises, is getting much better. And we asked: ‘How we can build on this?’”
However, on VAT, the Chancellor made it clear that a cut for the hospitality sector is not on the agenda. “That shouldn’t stop us making the point [about the VAT disparity between pubs and supermarkets],” said Findlay. “However, we must focus our efforts on areas where there is an opportunity for things to happen.”
Finally, on red tape, the trio discussed the risk of a “significant and disproportionate” hike in licence fees. Findlay reported that the Chancellor said this was something he would look into. “We made a plea for a moratorium on licensing regulations,” he said.
“And on planning, as businesses that invest in new builds and refurbishments, we expressed our frustrations with some local authorities, and said support from the government to tackle unnecessary delays is essential.”
Government plans for a statutory code of practice for pub companies were not discussed at length, Findlay said, as they are not within the Chancellor’s direct remit.