Pubs are under huge pressure following yesterday’s Autumn Budget statement as around 50 pubs are closing every month amid soaring costs, business leaders have warned.
Bosses said they were facing ‘a hurricane of costs’ as energy bills continue to rise for businesses still struggling from the impact of the Covid-19 pandemic.
Jeremy Hunt’s budget statement saw billions of pounds worth of tax rises and spending cuts that will make most people in Britain poorer and puts pressure on businesses already struggling under the weight of the cost of living crisis.
A recent poll by trade site The Morning Advertiser found that 70 per cent of pubs do not expect to make it through the winter as energy costs threaten to put them under unless the push their prices up to extortionate levels.
Scores of pubs have already been forced to close their doors this year as the economy struggles.
Pubs across the UK have been forced to shut down as they struggling with soaring costs and energy bills
At least 69 pubs closed down between January and June in England, Scotland and Wales, according to figures from the Campaign for Real Ale (CAMRA).
However, from July to the end of September, more than 150 boozers went under as the pressures of rising costs mounted, a study by Altus Group found.
The British Beer and Pub Association warned the shocking rate of closures for UK pubs could continue if landlords weren’t given more support by the government.
Emma McClarkin, the group’s chief executive, said: ‘It is right the Chancellor has acknowledged of the need for changes to our business rates system and extended and increased relief to 75 per cent for pubs, so they do not continue to be penalised through unfair taxation.
‘The failure to provide any further relief for our industry today will hit pubs, breweries and their customers extremely hard this winter, and will have a devastating, lasting impact on communities across the country.
‘The last thing [pubs] want to do is increase costs for their customers; they want to remain a place of solace, warmth and community, especially now, when the country needs them most.
An average of 50 pubs were forced to shut their doors every month between July and September
Co-founder and chairman of the City Group of pubs Clive Watson argued the budget statement ‘creates uncertainty’ for pubs going forward
‘The Chancellor says we need to weather the storm together, but pubs and brewers are still facing a hurricane of costs leaving nothing but destruction in its wake. Their costs up 22% on average from last year, we are now losing 50 pubs a month for good.’
Pub chain boss Clive Watson, co-founder and chairman of the City Group of pubs, said: ‘It just creates more uncertainty. I get the Chancellor can’t have an open chequebook on supporting businesses with energy support, but it’s more uncertainty on our sector and other sectors and they will rein in expansion plans because if we don’t know where our energy costs are going to be going forward then it’s going to put us off buying more pubs or investing in our existing pubs.’
CAMRA also argued the Chancellor should have re-introduced the freeze on alcohol duty to help pubs survive through the winter without having to raise their prices.
The group found that in the first six months of this year, at least 69 pubs shut down in the UK.
The North West and the South East of England were the hardest hit, with a dozen pubs forced to close in each region.
However, new openings across the country between January and June meant there was an increase in the number of pubs in most parts of the country.
CAMRA Chief Executive Tom Stainer said: ‘With consumers feeling the squeeze, it has been disappointing that the Chancellor didn’t announce any extra help to keep pub going affordable, such as re-introducing the freeze in alcohol duties to avoid additional increases in the price of a pint or bringing forward plans for a new, lower rate of duty for draught beers.
‘CAMRA will continue to campaign for extra support and a fair deal for the nation’s pubs, clubs, breweries and cider producers.’
Pub bosses say there’s ‘there’s no light at the end of the tunnel’ after Autumn Statement
By Rory Tingle
Pub landlords said there was ‘no light at the end of the tunnel’ after Jeremy Hunt’s Autumn Statement – as a brewery warned pints could go up by £1.59.
Addressing the Commons, the Chancellor unveiled tens of billions of pounds worth of spending cuts and tax rises aimed at restoring Britain’s fiscal credibility and repairing a £55billion ‘black hole’ in the nation’s finances.
While he insisted the UK ‘had to pay its way’, landlords insisted the ‘bleak’ state of pubs – which sustain around 800,000 jobs in the UK and are at the heart of local communities – meant they deserved extra help.
Mr Hunt unveiled one positive for landlords in the form of £15billion worth of business rates support for pubs, restaurants and High Street shops over the next five years, but nothing in the form of specific support.
John Magill, 46, the co-owner of Powderkeg Brewery in Woodbury Salterton, Exeter, has been hit with a 30 per cent increase in production costs, which ‘literally go up on a weekly basis’.
Peter Tiley, landlord of The Salutation Inn, Gloucestershire, said issues like high energy costs meant the outlook for pubs was ‘bleak’
Gary Murphy, director of the Campaign for Pubs and former landlord of the Ye Olde Mitre Inn, High Barnet, London, said: ‘Given what we’ve seen today, the idea that the Conservative party is the party of small business is quite ludicrous’
The entrepreneur predicted the budget could push up pints by £1.59 each – due to costs added by the minimum wage rise, the lack of any additional support.
‘There was nothing in the budget for small businesses like our essentially. If we increased our prices alongside our production costs, we’d have to sell to hospitality for 46p more a pint,’ he said.
‘That would mean a markup at the bar of £1.56, making it an average of £6.89 a pint at the bar.’
Dawn Hopkins, landlady of the Rose Inn in Norwich, praised the business rates measure – but said she was waiting to hear more details
And she said the outlook remained negative, telling MailOnline: ‘I feel like we’re in a downward spiral that is very difficult to get out of – I’ve had to put my prices up twice in the last couple of months just to cope with price rises we’ve had so far.
‘I’ve got a huge range of customers and in general they’re very downhearted. They’re having to cut their spending, including by going to the pub less – there’s no light at the end of the tunnel for us at the moment.
‘So it’s a double whammy – we’re having to reduce our hours and staff due to rising costs while our customers are having their own issues as well.’
Dawn Hopkins, landlady of the Rose Inn in Norwich, told MailOnline: ‘I feel like we’re in a downward spiral that is very difficult to get out of – I’ve had to put my prices up twice in the last couple of months just to cope with price rises we’ve had so far’
John Magill, 46, (left)the co-owner of Powderkeg Brewery in Woodbury Salterton, Exeter, has been hit with a 30 per cent increase in production costs, which ‘literally go up on a weekly basis’
‘I used to come several times a week but now it’s only once’: Pub drinkers say they’re cutting back
By Alex Storey
Pub regulars are facing a lonely winter after Jeremy Hunt announced massive tax hikes. Reacting to news council tax and energy bills are set to rise, drinkers in Newcastle spoke of how they will have to cut back on pints to save cash.
Local Ray Smith (right) was out in the city with his son and told of how they won’t be as many trips to the pub due to the soaring cost of living.
The 72-year-old retired business owner said: ‘Something has to give when you have X amount of money coming in but so much more going out. For some that will mean not going to the pub.
‘Forcing people to fork out so much money in bills is a vicious cycle. There will be a knock on effect, impacting businesses like pubs, and the economy in general.
‘People will cut down on going to the pub, but then prices will go up because companies will struggle. I only come out about once a week. But I may still have to make sacrifices and cut down on things like cigarettes.
‘Going out to have a drink is a pleasure not a necessity, and for that reason, it might be taken away from people, which is a shame.’
Ray Smith junior (right), a 48-year-old teacher, added: ‘I try and come to the pub as much as I can but at the moment it’s normally once or twice a week. I will have to spend less on drinks now. Instead of coming out a couple of times I might come out once.
‘I tend to come out with my dad and we try to get out when we can. It’s a worry because it’s important to see family and friends but people will stop doing that to save money.’
Waiter Louis Matas fears he will become more isolated as the winter hits. The 54-year-old, who lives alone, said: ‘I work five times a week but on my days off I’m always in the pub. I don’t spend much, maybe around £20 a time and I will sometimes get my lunch too.
‘But with the costs going up I might have to stay at home and get cheap cans from the supermarket. I haven’t cut down yet, but going forward I think I will have to get ready meals from the supermarket rather than eating in pubs.
‘It’s around £3.35 a pint now where I drink and that is only going to go up which will stop me coming out. I enjoy going out and seeing my friends but I’m worried that will stop. It’s good to get out but that will have to stop for lots of people.’
Thomas Johnson, of nearby Jesmond, drinks in the city most days and spends up to £40 a time. The 44-year-old, who doesn’t work, said: ‘I come out drinking nearly every day. I hadn’t seen the announcement but it doesn’t sound good.
‘I live with my mother and she is the main bill payer. It’s more than possible I will have to cut back on my trips to the pub to help out.
‘I see a lot of people turning to crime when they can’t afford things. I wouldn’t want to stop going out and seeing pals but it might be the only way forward.’
Glen Chalmers (right), 47, often drinks with his 18-year-old son before Newcastle matches. But now the retail worker is considering cutting back on their food and drink while out.
He said: ‘I try to come to the pub about twice a week and I will still come out despite these policies because I work full-time. But now we may have to look at the cheaper places, or try to get the meal deals that some pubs offer, as a treat.’
Outlining the other policies she had wanted to be included in yesterday’s Budget, Ms Hopkins said: ‘I’d like to have seen a cut in VAT for hospitality, not just for food but for alcohol as well.
‘That would have been hugely beneficial by helping us to cope with some of the price rises.
‘During the pandemic there seemed to be a real will to keep businesses and pubs going. It was desperate then but it’s also desperate now.
‘It’s actually scarier at the moment because we’re being left by ourselves and not getting any help.’
Peter Tiley, owner of The Salutation Inn in Berkeley, Gloucester, said issues like high energy costs meant the outlook for pubs was ‘bleak’.
‘A lot us are paying back thousands a month in Bounceback loans, and while we’ve had a good summer because of the weather we were relying on the government to soften the blow of the energy crisis to some extent,’ he told MailOnline.
‘To hear that’s not going to be happening now is very concerning to say the least. My own energy bills have doubled.
‘And unfortunately we have to pass cost rises through to customers in price increases but we’re also stuck with them because they don’t have a lot of money.
‘I get that we’re in a financial hole as a country and we need to tighten the purse strings, so you can’t just go dishing out cash.
‘But at the same time the energy crisis is an exceptional situation that requires exceptional measures – we’re back into a Covid-level situation really.
‘Support for energy bills for consumers and businesses is the only real giveaway I’d be asking for at this point – there are pubs shutting their doors right now because it’s just not viable any more.’
Gary Murphy is director of the Campaign for Pubs and former landlord of the Ye Olde Mitre in High Barnet.
He told MailOnline: ‘What we really needed was something substantial like a VAT cut, which would have helped them ride through some of these huge rises.
‘Heineken will be putting up the prices in January by 16 per cent. That’s 50p or £1 a pint. That’s a huge sum for businesses and consumers already under pressure.
‘The industry is in crisis – the small independent pubs, freeholders and small breweries that I represent in particular.
‘Given what we’ve seen today, the idea that the Conservative party is the party of small business is quite ludicrous, really.’
Commenting on the announcement of business rates relief, he said: ‘It definitely doesn’t go far enough. Obviously every little. It’s not going to save a single business.’
The landlord of the Plough Inn, which is the only pub in the village of Ellington, Northumberland, described the Autumn Statement as yet another blow to the trade.
Ethan Armstrong, 32, said: ‘The trade has already suffered amid the cost of living crisis and the pandemic.
‘Raising the council tax and energy cap is certainly not going to help the situation. It means people will be going out less. Trade is very uncertain at the moment as it is.
‘I am hoping the World Cup and then Christmas and New Year will see us through the next few months. But after that we don’t know what will happen.
‘We’re having to work much harder to get people through the doors. We have ”Warm Wednesdays” where people are invited in to save money on heating, and we have snacks on the bar.
‘We cater for an older demographic, and we do have some very loyal customers.’
The Plough Inn is a huge part of the local community and during the pandemic operated as a food bank.
Mr Armstrong added: ‘I would urge people to carry on going to the pub despite these hikes. If you don’t use the pub, you could lose it.
‘We are the only pub in the village and integral to the local community. It’s already a tough time and this is not going to help at all.’
UKHospitality chief executive Kate Nicholls said: ‘The Chancellor painted a grim picture of what we’re facing as a nation and Britain’s hospitality businesses are already in the midst of severe economic turmoil.
‘Survival this winter is the priority for venues across the country and there is the very real possibility that a significant proportion of our sector will not survive the winter. It was crucial that the Government addressed this today.
‘I’m pleased that the Chancellor has listened to the vast majority of UK Hospitality’s proposals on business rates, covering a freeze in the multiplier, extended reliefs and no downward transition.
‘This means those seeing their valuations decrease will see the benefit in their bills immediately, at the same time as increases are capped.
‘However, it remains the case that the current system is outdated and not fit-for-purpose. The Government made a manifesto commitment of root and branch review and it’s essential that this delivered as soon as possible.’
Sacha Lord, Night Time Economy Adviser for Greater Manchester, said: ‘Operators are being squeezed beyond their ability, and I fear we will now see huge cuts in staffing, reductions in opening hours and venues closing at a faster rate faster than seen during the pandemic’
Sacha Lord, night time economy adviser for Greater Manchester, said: ‘Operators are being squeezed beyond their ability, and I fear we will now see huge cuts in staffing, reductions in opening hours and venues closing at a faster rate faster than seen during the pandemic. It is a very sad state of affairs.
‘We will now see a downturn in consumer spending over the coming weeks and months, at a time when operators need the most support as they recover from the hangover of pandemic related debt.
‘Disposable income underpins the UK economy and I’m hugely concerned that the policies outlined today, will create a severe contraction in the sector. Spending on luxuries such as dining out, is naturally the first to go in times of cutbacks.’
Extending the freeze on tax thresholds to 2028 will drag all workers deeper in the system, meaning they pay more
Inflation in the UK hit 11.1% in October – the highest level in more than 40 years