By Matthew Payne
For centuries, pubs have been one of the bedrocks of British society and culture. These old institutions have been where many British people have gathered to wind down from the stress of everyday life. It appears that almost every politician from across the political spectrum strongly backs support for pubs. Is this because this action is a vote winner? Or are they a positive catalyst for the economy? Regardless of the reasoning, it holds true that pubs are a major issue across the British political landscape.
Whilst there is agreement that pubs must be saved, the proposed solutions are radically different. Some Green politicians have suggested community ownership of pubs that cannot sustain themselves as businesses. On the right, however, some different ideas have been floated: Restore Britain have proposed the option to allow willing pubs to open smoking rooms and serve weaker alcohol to under-18s.
Maintaining a profit as a pub is a challenging task in modern Britain. Large chains, such as J D Wetherspoon and Greene King, are able to make a substantial profit, while many smaller organisations have not fared so well. One major issue with keeping a pub in business is the large overhead required – these looming costs eat away at potential profit margins. Wage costs, high energy bills and taxes, include just some of the burden taken on by establishment owners.
Due to changes in business rates, brought in by Sir Keir Starmer’s Labour government, pubs were going to face far higher taxes in the coming years. According to UK Hospitality, from 2026 to 2029 the average pub would have seen an increase in tax of over £12,000 due to Rachel Reeves’ budget. However, since new Prime Minister Andy Burnham and Chancellor of the Exchequer John Healey have come into power, they have made clear efforts in order to help pubs, including cuts to their business rates – a complete reversal of the position adopted by the previous residents of Number 10 and Number 11. Is this move purely to win favourability? Or is it intended to aid the British economy?
Over the past 30 years, Britain has lost approximately twenty thousand pubs, almost a third of the total quantity of the institutions, and this pattern is showing no signs of stopping. There has been an onslaught of external factors driving blows to pubs across the British Isles in recent times, including the outbreak of the coronavirus and the exit of European Union.
In rural areas, it is particularly hard to operate a pub, due to logistical challenges. To go out drinking at a rural pub, an individual may require a taxi, an infrequent bus service or a designated driver, in order to avoid operating a vehicle over the legal blood alcohol limit. While drink driving laws have been around in some form since the 19th century (when they applied to horse-drawn carriages and steam engines), specific limits only came into effect in 1967. Since these specific limits became law, rural pubs have been facing an uphill task. It is a major challenge to run a business where the primary product, alcohol, cannot be sold to anyone without pre-determined logistics organised for the consumer.
The challenges faced by pubs are undeniable, and intervention may be required to save many of them. It is rare to find an issue that such a variety of politicians are as passionate about as the death of pubs. Andy Burnham has spent much of his first few weeks making them a central point of his premiership, having already announced a 20% cut in business rates for pubs, clubs and music venues. He has also been showcasing himself in pubs, pulling pints and even ranking bar snacks with John Healey.
Seemingly every political party wants the public to know that they are the ones who can save British pubs. So, why? What is the reason that politicians are so enthralled by pubs? Why are they such a hot button issue? The answer may be very simple: supporting pubs is a vote winner. Pubs are British establishments that are well liked by the public, and they have been struggling financially for a long time. From a public relations standpoint, it makes politicians seem relatable and likeable, while also showing that they support local business. Whether warranted or unwarranted, British politicians across the spectrum are and will likely remain supporters of pubs, while seemingly all politicians do want to save pubs, the specific methods used in order to help them is where arguments arise.
Government regulations are a factor in the decimation of the British pub industry. Taxes on property, payroll, income, alcohol and so on all contribute to the narrow profit margins available to establishments. However, while government taxation and regulation are among the causes of hurt for pubs, tax cuts and new policy could be what saves them. Each party has a different solution.
The Green Party, led by Zack Polanski, have suggested removing VAT from tickets to events at pubs. The Liberal Democrats have committed to a VAT reduction, dropping it to 15%. Kemi Badenoch’s Conservative Party have pledged to “cut red tape” to give pubs more freedom, alongside pledging to reduce VAT. Nigel Farage and Reform have a ‘Five-Point-Plan’ to save pubs: cut VAT to 10%, scrap National Insurance increases, cut beer duty by 10%, abolish business rates and, similar to the Conservatives’ ‘red tape cutting’, Reform would “change regulation” to give pubs more freedom. Perhaps the most unique solution of all comes from Rupert Lowe’s new party Restore Britain. Restore would also cut VAT, dropping it to 12.5%, but have also set out a few other policies, including controversially proposing the option to allow smoking in pubs – if landlords choose to implement such rooms.
Across almost all parties, there seems to be a consensus to cut VAT rates in some form. However, Labours’ alternative strategy of business rate cuts seems to have been a welcome policy by members of the industry. These cuts will also help other similar businesses such as nightclubs and music venues.
The number of pubs closing across Great Britain and Northern Ireland over the past few decades is something that should worry Brits concerned about protecting cultural heritage. However, is this something that should require as much government intervention and media coverage as it gets? Since the 1970s, the number of independent grocery stores (‘corner shops’) across the United Kingdom has dropped by well over 50%, yet it would be rare to find a politician photographed in any such failing business as frequently as political leaders are photographed in pubs.
It is true that as a key focal point of British culture and history, there is a strong case for the exceptionalism of pubs in terms of political policy. But in a capitalist society, there is also an argument that many people simply don’t want to go to the pub anymore and as such their numbers should dwindle. Perhaps the supply of pubs is simply far too large for the demand created by the British public. Furthermore, Gen Z are drinking far less than previous generations have, leading to smaller demand and reduced revenue, meaning the demise of the pub could simply be a natural consequence of the market.
Supporting pubs as a politician is and looks to continue to be a vote winner. However, is saving a naturally shrinking industry a good use of government funds? The support from politicians for pubs is here to stay, and whether measures by Andy Burnham’s new office, or any future government, can save the Great British Pub, only time will tell…
The views expressed in this article are the author’s own and may not reflect the opinions of The St Andrews Economist.
Image Credit: Wikimedia Commons
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