Pubs face a perfect storm that the Chancellor ought to be helping head off - Andrew Vine

When the Chancellor, Rachel Reeves, stands up in the Commons tomorrow to deliver her first budget, she may determine the fate of a great British institution.

Pubs depend for their survival on what she says. If Ms Reeves gives them a lifeline, places which have been at the heart of national life for generations have a chance of continuing to serve their communities into the future.

But if she imposes crippling new costs on pubs, Ms Reeves will accelerate an alarming decline in their numbers that will see yet more shut their doors forever.

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There is a perfect storm gathering over pubs which the Chancellor ought to be acting to head off.

A pint of lager being pulled in a pub. PIC: Lynne Cameron/PA Wireplaceholder image
A pint of lager being pulled in a pub. PIC: Lynne Cameron/PA Wire

Three factors are coming together to make the future of the pub even more precarious than it already is. The first is rising energy bills, the second the likely increase in employers’ national insurance contributions and the third – arguably the most serious – is a looming hike in business rates.

A 75 per cent business rates relief for pubs is due to end on March 31 next year, and then the following month the level of those rates is scheduled to rise by 2.2 per cent.

According to analysis by the commercial property intelligence firm Altus Group, the changes could inflict an average business rates hike of £12,160 for every pub.

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That could be enough in itself to tip some into going bust, but taken together with higher costs for employing staff and relentlessly rising gas and electricity bills, the outlook for many is grim. If beer duty goes up in the budget – a familiar tax increase by Chancellors – that will only add to the difficulties.

Matters are already bad enough. Last week, The Yorkshire Post revealed the scale of pub closures, with our region having lost 500 at a rate of one every three days for the past five years. The trend is mirrored nationwide, with 305 closing in the first six months of this year.

And once the doors shut, they rarely reopen, the buildings being converted into flats or offices.

This is a state of affairs that any pro-business Chancellor should be concerned about and doing their utmost to address, even against a backdrop of straitened public finances that means the government needs to raise every penny it can.

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With every closure, jobs are lost and streets which are already sinking into dilapidation because of shops shutting become even scruffier and less inviting places to visit.

Yet the business case for doing much more to safeguard pubs is often overlooked. If hundreds are shutting every year, the take from increasing their business rates is bound to diminish. Surely it makes far better sense to help them stay open so that they can generate income for the exchequer.

The trade body, the British Beer and Pub Association, estimates that a five per cent cut in beer duty would create 12,000 additional jobs, and all those people would be paying their income tax and national insurance.

So would all the people in the pub supply chains, such as those who work for the many wonderful independent breweries that have sprung up across Yorkshire in recent years.

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If Ms Reeves maintained the business rates relief, that could save even more pubs from closing and enable them to keep people in jobs.

But important as the business case is, there are also compelling social reasons to do everything possible to preserve pubs.

They are not just places for drinking – and increasingly for many, having a meal – but part of the fabric of British life. They are places to socialise, make friends or get to know the neighbours.

They are home to sports clubs and community associations, a lifeline for those who are lonely where they can find human contact, and places where in a crisis people instinctively come together to support each other.

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If anybody doubts how much pubs matter to the community, they need only look to the villages around Yorkshire where determined residents have banded together to reopen them after closure, such as Spennithorne, in the Dales, where The Old Horn Inn was given a new lease of life.

Along with local newspapers and shops where the staff know their customers, pubs are part of what makes areas tick and have distinctive identities.

The inability to meet others in the relaxed setting of the pub when they were shut during the Covid lockdowns was one of the most isolating aspects of the pandemic for many.

A lot of pubs were unable to recover from the economic damage of that dreadful period and even those which survived have faced a long struggle to recoup the losses they incurred.

They need and deserve help, not additional burdens that strain their finances to breaking point.

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