Even viable pubs are being closed now - we must fight!

Do you ever wonder what is actually going on with our local pubs?

You know, the ones just around the corner from where we live. The ones which were carefully positioned, designed and built to serve our local communities.

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Have you noticed how many of them are quiet now, how many appear to be struggling? Getting tattier? Have you noticed them steadily disappearing over the past twenty years or so, either demolished or adapted for alternative use? Do you ever wonder what’s happening, and whether anything could be done about it?

Perhaps you are one of the great many people who see the inescapable decline of local pubs as a sad but inevitable sign of the times, all merely attributable to simple market forces, or changing social habits. “Use it or lose it”, simple as that. But is it really that simple?

Maybe there is something else going on. Maybe there have been other factors in play which have contributed to this decline. What if we step back and look at exactly how politics and commerce have affected our pubs in recent years? It might begin to look as though it has not, in fact, all been inevitable, and that certain forces have actually been afflicting our pub industry, and actively contributing to its decline.

Half full, or half empty? Paul Crossman looks at what can be down to help our pubs

If that were so then it might suggest ways in which we could halt the process and in fact begin to turn the fortunes of our local pubs around. It might give local communities all across the land a chance to actually get back the pubs they really want. Well maintained, welcoming, characterful places that are able to serve their customers the products they actually want at a price they are happy to pay. It might give local people everywhere a long overdue chance to rediscover their deep, abiding love for a local pub which actually serves their needs, and is not simply a neglected pawn in somebody else’s game.

Pubs are a vital part of our cultural fabric, and occupy a very special position in our communal heritage. Our inns and taverns have evolved over hundreds of years into a quite unique national institution, and are not only a much loved part of our physical landscape, they are deeply embedded in our collective cultural identity. Furthermore they are a consistent source of delight for visitors to our shores who often rank a visit to a humble pub very highly among their favourite memories of their trip, suggesting that collectively our pubs have assumed an iconic status which is quite literally the envy of the rest of the world.

Pubs provide desperately needed space for people from all walks of life to forge bonds, vent their spleen, laugh out loud, hatch business plans, mourn, celebrate, catch up, discuss politics (yes, and religion!) or simply participate in a bit of communal relaxation; a role which somehow feels especially vital in today's frantic, increasingly distracting world. Good pubs provide a safe and regulated venue to enjoy alcohol responsibly, and are of course the very best place to enjoy one of our most outstanding contributions to the taste buds of the world, the genuine wonder that is cask (or if you prefer in this day and age; “craft”) ale!

The White Rose in Cornlands Road opened in 1957 but closed in 2009, one of many suburban York locals to shut.

Each pub is idiosyncratic, which is of course part of the fun, but collectively our pubs play a consistent, unifying role within our society. The very best examples go out of their way to provide a familiar, comforting and reassuring experience in whichever village, town or city you may happen to find yourself, but that of course is not all.

Thriving pubs also contribute enormously to the economy, including the public purse. They are particularly well placed to participate in sustainable local business, and to provide much-needed flexible, convenient employment, which is especially suited to those who wish to engage with and encourage the beating heart of their local community.

>>> FLASHBACK: 20 pubs York has lost in 20 years

Yet, given our enduring grass roots love for our pubs, there is no escaping the fact that in recent years they appear to have been hugely undervalued by the vast majority of our politicians, who have at best shown complacent indifference to this precious part of our heritage, and at times given the distinct impression of actively wishing to undermine the entire industry.

Our recent governments have been disastrously in thrall to our powerful supermarkets, and have given them almost limitless scope to supply cheap alcohol, whilst simultaneously burdening our pubs with a succession of policies which have seemed at times positively punitive.

Many point to the smoking ban as a pivotal moment, and there is no doubt that some pubs and clubs did suffer, especially those that did not have the outside space to provide a comfortable shelter. However, cheap supermarket booze and many other factors were already chipping away at the pub trade well before the ban.

There were increasing compliance costs to contend with, and the ever present burden of high business rates. Add in constantly rising energy costs, the hated beer duty escalator and then eventually top it all off with a deep and relentless world recession and what you have is a pretty toxic environment in which to operate  a business where the overheads are very high, and the disposable income of customers is in increasingly short supply.

However, at least these factors were affecting all pubs pretty much equally (except perhaps the smoking ban), but it must be said that there is one disastrous factor which heaped further woe on just one particular part of our pub industry, and once again the blame for it must ultimately be laid at the feet of our politicians.

The “Beer Orders” of 1989 which broke up the traditional brewery estates with the aim of encouraging more competition in the pub sector turned out to be an object lesson in poor legislation, an ill-thought out plan with such dire enduring consequences that it is now synonymous with the phrase “unintended consequences”.

Margaret Thatcher's Government's legislation was ill-considered, argues our columnist

In suddenly flooding the market with thousands of pubs, without imposing any proper controls, Margaret Thatcher’s government simply created an opportunity for deep-pocketed venture capitalists to acquire vast estates of valuable property almost overnight, thus delivering roughly half of our precious and historic pubs into the hands of newly-formed huge, powerful corporations who have exploited them (and the people who run them) beyond the point of sustainability ever since.

The icing on the cake for the new “pub company” (pubco) owners was the fact that they were allowed to continue operating the “beer tie” (a traditional arrangement whereby tenants historically had to buy their beer from the brewery that owned the pub) despite the fact that the new pubcos  had absolutely nothing to do with brewing beer. Furthermore they quickly realised they could charge pretty much whatever they liked for it. So they did, of course.

A survey earlier this year found the average York pint cost £3.15

Unsurprisingly, this proved to be a plan utterly devoid of long-term merit, as the share of profit going to the pubcos left many of the actual licensees running the pubs with far too little revenue of their own to actually sustain a business, let alone save or invest. Increasing failures were inevitable, and pretty soon there emerged a pattern of regular licensee failure in all but the very busiest pubs, a process known in the trade as “the churn”.

Many licensees have lost everything as a result of impossible trading terms, and the pubs from which they were driven also suffered from the resultant instability. The buildings themselves suffered because of lack of investment, but all the while the pubcos relentlessly increased the beer prices to the licensees, squeezing their margins ever more. In many cases customers began to vote with their feet, thus signalling the beginning of a long and tragic cycle of decline.

The business model operated by these companies is widely acknowledged as a catastrophic failure, sadly one which has ravaged pubs the length and breadth of the country. It has left the two largest operators, Punch Taverns and Enterprise Inns, riddled with billions of pounds of unsecured debt, accrued during the credit-rich Nineties when they both embarked on massive pub acquisition sprees in a reckless race to secure maximum market share. At their height they each owned nearly ten thousand pubs, giving them control of more than one third of our (then) national pub stock. Now the interest alone on their debts is proving a very heavy burden indeed, especially for the put-upon surviving leaseholders whose businesses still have to yield the revenue to pay that interest.

The Turf Tavern in Dringhouses - another York pub that was lost

They big two, and the many other companies who have aped their model, have for some time now been reduced to asset-stripping their largely decaying, under invested estates, selling off the pubs which they deem (but, many would say, have rendered) no longer viable. The result is that their estates have roughly halved in size over the past eight years or so, which begs the question; “what became of those thousands of pubs?”

In fact it has now gone a stage further so that the viability argument is no longer even that relevant, these days even the pubs that are still making money, and therefore assumed they were to some extent “safe”, are discovering the hard way that they have in fact been secretly up for grabs to the highest bidder. The staff and customers at The Saddle in Fulford for example might have some interesting opinions on that particular matter.

Paul Crossman recently bought The Woolpack in Fawcett Street from Punch Taverns. New manager Steve Bradley is pictured. 

The very fortunate ones may find their way into the hands of sympathetic new owners who genuinely care about them, and are prepared to make the significant investment needed to revive them. Sadly though these cases are still comparatively rare, partly because even for a  fairly priced pub it is very difficult to get funding, as the banks now tend (often mistakenly) to view pubs as essentially toxic, but mainly because the simple fact is that there is quicker, easier and (in the short-term) simply more money to be made by disposing of these well-placed sites for conversion to an alternative use.

In this way we have lost 20 per cent of our national pub stock over the past 12 years or so. Half of the 46,000 or so that remain are still under the crippling yoke of the beer tie, which puts the licensees concerned at a severe competitive disadvantage, not only in a financial sense, but also in terms of the choice they can provide.

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For example, often to their great frustration, the bulk of tied licensees have extremely limited, if any, access to the great beers currently being produced by our burgeoning new craft microbrewing industry, which is a fairly major problem given that the craft brewing scene is the only sector of the beer industry which is currently in growth.

Clearly there are a great many problems within our pub industry at the moment. So many in fact, that most of our politicians have spent recent years seemingly paralysed with bewilderment. However, on Tuesday of this week something extraordinary occurred during a very dramatic debate in Parliament.

The current government has been manoeuvred against the odds (and in truth only by relentless, dedicated campaigning from various dogged devotees who have steadfastly refused to give up on pubs) into beginning to address the thorny issue of beer tie abuse. About time too, considering that four separate government Select Committees in the last ten years have all urgently requested exactly such statutory reform, but have each time been met with a distinct lack of action.

>>> FLASHBACK: We launch campaign to give locals a say on pub closures

A statutory code and adjudicator are promised in the new Small Business, Enterprise and Employment Bill currently progressing through Parliament, and Tuesday’s debate saw a key vote on a crucial amendment which may transform the industry playing field, by giving tied publicans an option to break their tied supply arrangements if they feel they are disadvantaged by them.

This would allow them to source their beer from the open market at a fair price, whilst paying their pubco landlord a “Market Rent Only” (known as MRO) for the building, as with any other normal commercial venture.

The stakes in this vote were extraordinarily high. Unsurprisingly, the pub companies have fought the entire concept of MRO tooth and nail, and the alarmist arguments of their expert lobbyists actually persuaded the government to impose a “three line whip” on the issue, whereby all Coalition MPs were instructed to vote against the amendment.

However for many tied licensees (50 per cent of whom now earn less than £10,000 a year according to CAMRA figures) MRO represented a crucial lifeline, offering a potential way out of an impossible predicament.

As it turned out the vote led to a shock defeat for the government. Around 40 Coalition MPs (including 17 Tories) felt sufficiently swayed by the evidence to defy the whip and vote in favour of the amendment. I can personally testify that the outpouring of emotion from the many tied licensees who had travelled to London to watch the debate live from the gallery at Westminster was extraordinary, sheer unexpected joy at this great result for a genuine grass roots campaign, a refreshing example of successful cross-party democracy.

However the truth is that tackling tie abuses will still only be a part of the solution for our industry. Much wider policy reform is needed on a great many fronts which will ultimately require politicians to fundamentally review their current position on the whole, already vexed, issue of alcohol supply in our society. This will clearly take some time.

There is though, one particularly urgent and crucial issue which needs immediate attention, and which is the reason for this campaign and the accompanying petition. It is that of our fatally flawed planning laws, which put pubs into the same “permitted use” category as a plethora of other quite unrelated business types, including betting shops, fast food outlets, pay day loan shops, pawnbrokers and perhaps most worryingly of all, supermarkets.

The Corner House in Clifton. It closed last weekend and will become a Tesco.

These rules mean that a pub can be converted to any of these (highly profitable) uses without any need at all for a planning application, and therefore of course without any consultation with the local community.

Such is the backdrop to the Be Vocal for Your Local campaign, which highlights the fact that our planning laws are wide open to exploitation by those who evidently have no qualms at all about unilaterally depriving our communities of their much-needed but currently beleaguered pubs. 

This situation is an absolute gift to hard-nosed freeholders whose only goal is to maximise the cash return for their "assets" by any means necessary, and who are in turn finding eager allies in the form of cash-rich corporate buyers hungry for prime local sites, such as the supermarket chains.

The urgent need to tackle this crisis arises from the fact that the beleaguered pubcos have steadily been stepping up their asset conversion and disposal efforts, contributing enormously to the currently terrifying national pub closure rate - 31 per week according to CAMRA figures.

The pubcos themselves are keen to point out that they sell most pubs on with a premises license in place, as if to suggest that this is somehow a guarantee that the new owner intends to continue running the place as a pub. The evidence on our streets however, is that within months the vast majority seem to end up as something else entirely. Alarmingly, both Punch and Enterprise have made renewed references to “alternative use” since Tuesday’s vote.

Our national planners need to act NOW to begin to close this lucrative loophole in our planning laws, which is currently unfairly and artificially inflating the value of pub properties, putting them wholly out of reach of those who would happily invest a sensible amount to secure their continued existence and hopefully restore their prosperity.

The Yearsley Grove pub being demolished in 2013

At present this leads to communities being permanently deprived of essential historic social assets without any consultation whatsoever, often seeing them replaced with a new supermarket which is likely to decimate any other existing local trade, at further cost to the locality.

National policy will clearly take time, although 87 MPs have already signed Early Day Motion 208 which proposes the necessary changes. However local planners can move faster, and indeed, this is what they must do.

This campaign, and the accompanying petition, is intended to give City of York Council a convincing mandate to act now, using the statutory powers available to them, in order to protect our local community pubs with emergency measures. Eventually after proper consultation we would like to see pub protection formally enshrined within the forthcoming Local Plan.

This would see York joining the growing number of UK Councils who can truly claim to have pub-friendly policies, and we would be drawing a line clearly warning those eyeing up our pubs that we in York are not a soft target.

This is not about trying to save all pubs no matter what, and some pubs will still inevitably be lost where there is genuinely insufficient local will to keep them, or indeed trade to sustain them. In such cases the hugely over-used “mantra of use it or lose it” may be appropriate, but this is very far from the truth for many other pubs, where one would be far better advised to exclaim “just give it a fair chance!”

What is crucial is that in each case, where a pub stands to be lost, the local community should at least have the opportunity to make their opinion count via consultation.

After all, when pubs are gone they are gone forever, and at the moment they are going way too fast.