Beer Taxation and Pubs

Part of the debate – in the House of Commons at 2:19 pm on 28th March 2019.

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Photo of Anne Main Anne Main Conservative, St Albans 2:19 pm, 28th March 2019

I am pleased that the hon. Gentleman mentioned the community aspect in his valuable intervention. Some pubs threatened with closure are taken on as community assets, but it is incredibly hard to make the business case, given how business rates are. No matter how willing the community is, there are only so many pints of beer that anyone can drink to help provide the income it needs, unless we want to encourage people to be blotto night and day. We have to ask whether the business model is workable, and for many pubs it just is not.

The cut of 33% in rates for businesses with a rateable value of under £51,000 was a major step, but in areas such as St Albans it is not having an impact. Areas with high property values such as St Albans are almost totally overlooked. Many people have mentioned heritage and beautiful buildings: pubs in my area are under a huge threat of being turned into domestic properties. That is a real worry. They are struggling at the cliff edge, and we have to address the issue now.

The 2017 business rates formula for pubs uses a methodology for setting the rateable value based on fair maintainable trade. Nobody seems to understand how that works. The rateable value is driven mainly by the pub’s turnover and it takes into account property valuations. That means that even small pubs in St Albans are having huge hikes in business rates because they happen to be settled among much higher-value domestic properties. The formula does not take that into account, so it penalises small business operators.

John Grogan mentioned micro-breweries: the formula also penalises the independents, which is a real problem. We may lose some of the quirky pubs on our high streets that offer that level of interest and difference and prove a huge pull for tourists who come into areas such as St Albans and appreciate pubs such as The Boot and Ye Olde Fighting Cocks, many of which have historic backgrounds and architecture to match. That means that it is difficult to expand or increase footfall, because they are extremely small.

Save UK Pubs has compiled a useful document outlining the increases that pubs face. I have given it to the Minister before, but I will send it to him again in case he has lost it. The Boot, which I have just mentioned, is an absolutely tiny heritage pub—some people have bigger sitting rooms. People there reckon they would have to sell an additional 22,000 pints to cover the additional £51,000 in business rates that they now have to pay—a 280% increase. That is unsustainable.

If the Chancellor came up with the model, he certainly was not looking at St Albans when he did. Christo Tofalli of Ye Olde Fighting Cocks told me that unless there is proper reform of the relevant taxes, licensing laws and duty costs, his pub will be finished. He bought this beautiful, historic pub; people can work out from its name that it goes back a long time. Bringing it back to life has cost him a huge amount of personal investment. Having pulled it back from despair, he expects people in this House to get how important a pub is. It is not necessarily a drinking outlet—there are plenty of those. A pub is family to some people and part of the community to many people. Once it has been turned into a posh house, as happens in my constituency, it will never come back. I put in a plea for the Minister not to hide behind all the different things that have been done. It is not enough, and we need to look at the situation again.