The Future of Pubs

Andrew Griffiths Excerpts

Thursday 9th December 2010 Westminster Hall

[Karen Bradley]

I acknowledge my right hon. Friend’s comments. Although I do not believe that we want to make this a terribly party political debate, I think that he has made some very valid points.

I will cover some of the issues that I have already raised and on which the all-party group campaigns, and I am sure that colleagues will make their own contributions to the debate. It is incumbent on me to declare my own personal interest in this particular issue. For the last 43 years, my family has run a pub. My grandparents, my parents and my brother have been landlords of the same community pub. My aunt and uncle have also run pubs, so my family has had a long interest in the pub trade.

The pub that I grew up in was originally a tenanted pub belonging to one of the big brewers. It was then granted a long lease, following the beer orders of 1989. It was then bought out by one of the big pubcos. Finally, just over 12 months ago, my family, after 42 years of running the pub, were able to buy the freehold and buy out the beer tie, meaning that for the first time in all those years they were at last in a position where everything that they worked for was for themselves. So, I clearly have quite an interest in this issue. I want to explain what is unique about pubs.

[Andrew Griffiths (Burton) (Con)]

My hon. Friend clearly points out the benefits to her excellent family business of buying the freehold of their pub and running it for themselves. However, does she agree that many pub companies offer a great product to the public, that they provide an opportunity for people to start their own small business and that, in many cases, they play a very important role in their community?

[Karen Bradley]

I thank my hon. Friend, and I note the points that he has made. My own personal experience of pub companies has perhaps not been favourable. However, I fully accept that they have a place and a role, as do brewers, and it is important that we have the pub industry working in a way that supports all types of pubs.

--- Later in debate ---

[Karen Bradley]

I agree absolutely, and that is a very good contribution to the debate.

It is not possible to take what works in one pub, move it to another building and make it work. Pubs have different clienteles, they are in different locations and they have different layouts. I accept that there are some pub chains that have a sort of homogenous generic feel, but I would assert that almost all the successful ones have not moved into existing pubs, but have taken other premises, such as old banks and shops, and turned them into pubs. What works in one community pub cannot be moved to another building and made to work there.

As we know, some pubs are based on food sales, and they can be successful, but other pubs are drinkers’ pubs. I know from experience that a drinkers’ pub cannot be changed into a food pub. It simply does not work. Customers who come for the drinking will leave if they think that it is a food pub, and others will not necessarily be attracted.

[Andrew Griffiths]

I agree with my hon. Friend’s comments. Does she accept that the smoking ban was one major reason why so many wet trade pubs, which focus predominantly on selling beer, closed? Many local pub customers left because the smoking ban was introduced. Although not many people in the industry are calling for the ban to be overturned—I do not think that that is what people want—does she recognise that those pubs have been hit particularly hard?

[Karen Bradley]

I do not dispute that some pubs have closed as a direct result of the smoking ban, but I do not think that the industry wants the ban to be rescinded. The pubs that have closed as a result of the smoking ban would not reopen if it were rescinded. The wet pubs that are successful have adapted to the smoking ban and compensated for it.

Dependence on a building makes a pub unique, but it is also at the heart of many problems that pubs face. As for pub companies and the beer tie, the beer tie has a long history. It dates from the time when brewers ran their own pubs and wanted to ensure that their pubs sold their beer, which is a sensible business model. Brewers had a vested interest in ensuring that their pubs were well run, and self-employed tenant landlords ran the pubs for them. Again, that is a good business solution. People were given the chance to run their own business and, as long as they paid their rent and continued to sell the brewers’ beers, the brewers could leave the landlords to it. Brewers had a guaranteed and responsible drinking outlet; clearly, they wanted to ensure that their landlords sold responsibly.

In those days, landlords bought directly from the manufacturer, cutting out middlemen and their margin. However—I remember it well—the industry moved to gain more security of tenure for tenants, who often had 12 or 18-month tenancies, as well as the option for landlords to sell guest beer, which is lucrative and allows them to make a significant profit for little extra effort. As a result of that pressure, the beer orders were introduced in 1989. No doubt the intention of the orders was good. They were meant to increase competition by reducing the size of brewers’ estates. Offering tied landlords the option to sell guest beers was a good move that allowed them to make more profits. The orders also gave tenants the security of 20-year leases. My parents were some of the first to benefit from the changes when they took out a 20-year lease and introduced a guest beer. At the time, the industry was positive about the changes, and welcomed them.

As is often the case, however, the problem with the legislation was its unintended consequences, by which I mean pubcos. Under the beer orders, only brewers are restricted in the number of pubs that they can own, and pubs owned by non-brewers, which do not sell only one brewer’s beers, do not need to offer guest beers. Pubcos became the middlemen, buying beers from a range of brewers and selling them to their tied landlords, who lost the right to offer guest beers.

The pubco business model is certainly clever and innovative. I am a chartered accountant—that is probably another interest that I should declare—and I must say that I have always admired the pubco model and thought that some clever financial whizz kid came up with it. Pubcos raise finance to buy large estates of pubs from brewers by securitising future rental income, which is the only asset that they have. Some of those pubs are tenanted, some are leasehold and some managed houses. The pubco makes money from its margin on selling beer to tied landlords and from its rental income. If a pubco wants to increase its profits, it must increase either margins on beer sales or rents, or both, which leads to landlords being squeezed twice.

Rents are based on barrelage, or sales, not rateable value or any other measure that I would consider sensible. Rents increase in line with the retail prices index, even when pubs are struggling, and are reviewed upwards if sales increase. Even if a self-employed landlord is successful and increases beer sales, their rent will go up and the profits of all their endeavours will be given back to the pubco.

--- Later in debate ---

[Karen Bradley]

I was not aware of that letter, so I thank my hon. Friend for raising that issue. I look forward to reading it.

A pubco area manager might also suggest that a landlord adopt a practice that has worked elsewhere, such as showing live football. However, a one-size-fits-all approach does not work. Pubs are all different. Just because one pub succeeds in selling more beer after installing equipment to show live football, it does not mean that a neighbouring pub will do so as well, and it must be borne in mind that under leasehold agreements, the landlord is responsible for buying all the equipment, fixtures and fittings and entering into an arrangement with the sports provider. Landlords can therefore be left with significant outgoings and future liabilities, but no extra revenue. If they do make extra sales, their rent will be reviewed and increased the following year.

[Andrew Griffiths]

I am sorry to interrupt my hon. Friend again—she is making a strong case—but speaking as a Member who represents the constituency in which the country’s largest pub company, Punch Taverns, is based, I must urge her to accept that there are many pub companies in this country that support their tenants in a positive way. As a result of the actions of pub companies, there are many people in business who would not have thought about going into business without having that help, support and expertise. Although there are examples of practices that we should not be content with, the reality is that many people benefit greatly as a result of being an employee or tenant of pub companies.

[Karen Bradley]

I hope that I am not giving the impression that I am completely opposed to pub companies, because I appreciate that they have a place in the market, but it is important to put on the table some of the practices that are making it difficult for pubs to survive. The debate is about the future of the British pub, so it is important that we understand how pub companies and practices could be improved to save even more pubs.

Another area where pubcos may offer concessions on prices to tied landlords is in return for the landlord giving up the right to take income from, for example, gaming machines, pool tables and other such things. Gaming machines are a really important part of the landlord’s income, but many landlords find that they are forced to accept the loss of that income. The problem is that they have lower-priced beer, which they sell at a lower price so that more is sold. Their barrelage then increases, their rent goes up, and they end up no better off. It is important that we ask pub companies to look at how the rents are set, so that we can reach a point where it is in landlords’ interests to take the offers from those companies and work with them to make everyone better off.

I want to mention the Fair Pint campaign, which represents the interests of tied publicans across the UK. It has found that 67% of tenants earn less than £15,000 a year from their pubs, and that includes 50% of pubs that have a turnover of more than £500,000 a year. I can assure Members that one has to work very hard to sell £500,000 of beer a year—at £3.50 a pint, that is nearly 150,000 pints a year, or around 400 pints a day. I think that £15,000 a year is little reward for working that hard. It is no coincidence that most pubs that close are owned by pub companies, especially when one considers the effort involved and the fact that, no matter how hard one works, someone else can end up benefitting as a result of the contractual arrangements. As I have said, I accept that pubcos are here to stay and hope that, with a little action from the Government, we can make the system work better for all.

I ask the Minister to consider looking at basing rents on rateable values, or at some other system that does not penalise successful, responsible landlords. I also ask him to look at the beer tie to see whether a system could be developed that would allow a guest beer or some such incentive to be introduced. Good, well-run pubs encourage sensible drinking, so I hope that the Government will look at the sources of binge drinking, which largely are not pubs. Although I accept that there is a need to look at how policing is paid for, it will be little help to the pub trade if the responsible landlord has to make a contribution while the supermarkets and off-licences that sell at below cost price make no contribution because they close before midnight. Unlike many Government Members, I support the current licensing laws and ask that, instead of introducing new laws, the existing ones be properly enforced to ensure that those guilty of encouraging anti-social behaviour and binge drinking are targeted; that is preferable to a blanket restriction being imposed on everyone.

--- Later in debate ---

[Mr Andrew Turner (Isle of Wight) (Con)]

Thank you, Mr Benton, for the opportunity to speak in this debate. I congratulate my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) on securing it.

I would like to raise awareness of the problems facing local pubs. In recent years, there has been a steady decline in the number of pubs. Last year, local pubs across the country were closing down at the rate of 52 a week. There are many reasons for such closures. Obviously, some will be unavoidable. If a pub becomes financially unviable due to major competition, that cannot necessarily be handled. However, we have a large problem with pubs facing closure due to private investors buying them, not to run them as pubs, or with the intention of investing in them to help them become successful businesses, but with the intention of closing them to renovate them and turn them into numerous flats, which can be sold on to make some quick money.

I saw that with a local pub in my constituency on the Isle of Wight. The Partlands was a popular pub that was turned into flats. Such closures are having a negative effect on local communities up and down the country. The pub has traditionally been a focal point for local communities. Closing local pubs is killing village life.

[Andrew Griffiths]

I recognise my hon. Friend’s concern about pubs closing, but does he also recognise that many other buildings are being converted into pubs? In my constituency, an ex-high street bank has been turned into a pub. One sees many commercial premises being reinvented as drinking establishments. We should not get particularly hung up about the building, but should instead consider the facilities that it offers.

[Mr Turner]

My hon. Friend is right, but the new pubs tend to be in the centre of town, whereas the existing pubs tend to be in the suburbs. That makes a difference.

--- Later in debate ---

[Greg Mulholland (Leeds North West) (LD)]

I thank you, Mr Benton, and Mr Speaker for understanding and accommodating my somewhat challenging situation, in that I have to speak in two debates at the same time. If I start going on about student fees, I hope that you will forgive me and put me back on track.

I thank my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley)—when I say “Friend”, I mean it literally—for her excellent introductory speech, which showed a depth of real knowledge drawn from personal experience. I have had the great pleasure of meeting her parents, who, as publicans, have done such a good job in their community for so many years. I am absolutely delighted that they have now got their hands on their pub, that they own it and that they can run it as they like. We would, I hope, all agree that those of us who believe in small businesses and localism should want as many of our pubs as possible to be in the hands of those who run them, and the save the pub group certainly wants to campaign for that.

My experience of pubs is slightly different from that of my hon. Friend, in that it relates largely, although not entirely, to the other side of the bar. I have worked in some pubs, but I have spent an awful lot more time on the other side of the bar. A little over 18 months ago, however, I decided that we needed a save the pub group in Parliament because the British pub faced such a crisis and, as hon. Members have so eloquently explained, because the pub is central to our communities. As my hon. Friend mentioned, the pub is iconic to us as a nation. Pubs are unique to this country and are part of our heritage, history and culture, and we lose them at our peril. Sadly, we are losing them in great numbers.

The biggest scandal, which some organisations, companies and developers try to cover up, is that we are losing viable pubs every week. Some of those pubs are actually profitable when they are closed. As the hon. Member for Isle of Wight (Mr Turner) so powerfully said, that is happening simply as a result of the greed of developers and individuals who see an easy way to make money, and that is not acceptable.

I ask those hon. Members who are concerned that we do not go down the route of having more planning restrictions to accept that the community has the moral ownership of community pubs—pubs that have been in the community for years and years. Legally, of course, those pubs will go through certain hands, and as my hon. Friend said, they will have passed through the hands of breweries and into the hands of pub companies. Although the simple reality is that those organisations legally own the building and the business, the moral ownership is surely with the community that the pub has served for many years. That is not, however, reflected in planning law.

[Andrew Griffiths]

My hon. Friend has a great record of standing up for the great British pub in this place, and we all applaud him for that. I absolutely agree that we need to do all we can to preserve pubs, but one difficulty is that many people are put off making the large investment involved in buying a pub—purchasing a pub is a heck of a financial commitment. However, somebody who has attempted to run a pub and been unable to make it viable may be prevented from realising that asset if we introduce restrictive requirements for the sale of pubs. Does my hon. Friend share the concerns of those who say that the unintended consequence of that might be that we put people off investing in pubs and becoming landlords or publicans in the first place?

[Greg Mulholland]

I agree with the hon. Gentleman on many things, but I am afraid that I simply cannot see his logic on this occasion. Let me explain the position of the save the pub group to make it absolutely clear. If one pub business fails, he would surely agree that another pub business should have the opportunity to attempt to make the pub a success. At the moment, people are prevented from doing that simply because the owner says that they do not want the building to be used as a pub any more. Even if the entire community wants it to be a pub, even if it is viable and even if it makes an awful lot of money, the community has no say.

I am delighted that the Prime Minister has chosen, a little belatedly, to appoint a Minister with responsibility for community pubs, whom I had the great pleasure of welcoming at the save the pub group’s British pub week event a few weeks ago. That appointment is very positive, and it is handy that the Minister is also a Planning Minister. I therefore say to him that although we are looking forward to the upcoming decentralisation and localism Bill, it must give communities the right to have a say, through the planning process, in the future of community pubs, which we all say are so important.

--- Later in debate ---

[Andrew Griffiths (Burton) (Con)]

I welcome the community pubs Minister to his position, and congratulate him on his elevation. Few Members of the House have done more to support brewers and the British pub industry. The coalition Government’s commitment to the pub trade is demonstrated by our pubs Minister being pint-sized, and I am sure that he will be stout and resolute in his support for the industry—[Interruption.] And never bitter.

I thank my hon. Friends who arranged the debate. It is testament to the House’s commitment to the pub and the beer industry that so many hon. Members are giving up their valuable time to contribute to this substantial debate on a day when such an important discussion is taking place in the main Chamber. That is hugely encouraging.

I also welcome colleagues from the Campaign for Real Ale. Everyone will agree that it has done a huge amount of work to develop real ales, and to support British pubs, and we should commend its work. Long may it continue to strive and to develop. The manifestos of all the main political parties at the last election included a commitment to the British pub. The Liberal Democrats, the Conservative and Labour parties all had a section pledging their support for the British pub and brewing industry, but the pub trade is still in a perilous state. My hon. Friend the Member for Isle of Wight (Mr Turner) said that 56 pubs were closing every week. I am pleased that the statistics that I was given recently showed that that number has slowed to 30 pubs a week, although we all recognise that that 30 is too many.

[Karen Bradley]

Perhaps the rate has slowed down because there are fewer pubs, so the stock of those that can be closed is smaller.

[Andrew Griffiths]

That is absolutely true. Last night, I hosted the all-party beer group’s Christmas party. We sampled 25 brews from some of Britain’s best brewers. I was pleased that Marston’s was represented, and I am told that it will open 20 new pubs this year, which is encouraging, but we recognise that the pub estate has shrunk dramatically, and every pub lost is a community resource that will be missed. If we are to stick up for the commitment that all parties made at the general election, we need action, not just talk and fine words, to deliver meaningful support to the British pub and brewing industry.

It is important to examine why we are in this situation. There is no doubt that the smoking ban had a dramatic impact on many pubs throughout the country. Many pubs that were reliant on the wet trade were unable to find alternative income when drinkers who had used their pubs for many years decided that if they could not enjoy a cigarette with their pint they would stay at home with a can of lager and sit in front of the television to smoke. That is regrettable, but we all recognise that the time to overturn the smoking ban has passed.

[Glyn Davies (Montgomeryshire) (Con)]

My hon. Friend is right to say that there is no chance of overturning the smoking ban, but I like to think that there may be a chance of introducing legislation to allow smoking somewhere inside pubs. Overturning the smoking ban is not realistic, but it is a realistic ambition for people to have the opportunity to smoke in pubs somewhere where other people do not have to go.

[Andrew Griffiths]

I understand my hon. Friend’s concern, and many people support his suggestion. The danger is that if we lose sight of the real problems facing pubs and focus on reintroducing smoking in them, we may lose our focus on the more pressing problems that lead to pubs closing.

[Greg Mulholland]

I thank my hon. Friend for giving way. I apologise, Mr Benton, that I did not explain earlier that at the request of the Speaker I must return to the main Chamber after his speech.

The save the pub group does not have a position on the smoking ban, but we called for a review of its impact on pubs and clubs. That was promised by the previous Government, and it is disappointing that the response by the Department of Health to the save the pub group was that it would not go ahead with that review. We believe that it should take place.

--- Later in debate ---

[Andrew Griffiths]

I thank my hon. Friend for that intervention. His commitment, effort and determination to stand up for the British pub are laudable. I was fortunate to spend a few hours with him at the British beer festival, and there is no doubt that he is a big supporter of the brewing industry.

There is an elephant in the room that we have not yet discussed. We debate the impact of the tie, and whether it is good or bad to have so many pubs in the tie. My hon. Friend the Member for Leeds North West (Greg Mulholland) referred to Punch Taverns, and I am delighted that Burton is the home of brewing. It is where Bass, which used to be the world’s No. 1 brand, was developed, and we are still the home of Marston’s Pedigree and Carling Black Label. We even brew Cobra for anyone who likes beer with their curry on Saturday night. It is the home of the National Brewery Centre, and I urge anyone who has a spare hour to come to Burton and enjoy the delights of that reopened centre, which gives a fantastic insight into our brewing heritage and history. Burton has a proud heritage of brewing, and we are what we are because of our brewing history. However, we want the brewing and pub industries to have a bright and exciting future.

Punch Taverns has been through many difficulties over the years. I recently met Ian Dyson, the new chief executive who has just taken over. I was reassured to discuss his plans for the future of Punch Taverns at some length, and in particular his desire to work with his tenants, support them and focus on their needs. The company has learned many of the lessons that other pubcos perhaps still need to learn. Because of that, I hope for both Burton and Punch Taverns that the future is bright.

What we are missing is a change in people’s drinking habits. Hon. Members may be surprised to learn that 70% of all alcohol sold in this country is sold through the off-trade and supermarkets, and we cannot ignore the impact that supermarkets have had on our drinking habits. The smoking ban is a problem, and there is no doubt that supermarkets have capitalised on that and used their might to drive down the price of alcohol on supermarket shelves, particularly beer. That has had a major impact on the viability of pubs. Let us be honest: pubs will survive if publicans can make a fair living.

[Mr Marcus Jones (Nuneaton) (Con)]

My hon. Friend makes a good case on behalf of the pub industry. Does he acknowledge that in addition to the difficulties caused by low-cost selling and the special offers by large supermarkets, the huge increase in beer duty under the Labour Government—around 26% over the past two years—has had a very detrimental effect on the pub industry? That has widened the gap between the purchases that people make in off-sales and those they make at the local pub.

[Andrew Griffiths]

My hon. Friend, as always, makes a valid point. In fact, the figures are worse than he suggests. Under the previous Government, duty on beer increased by 60%, while the increase on spirits was just 15%. That differential has had a huge impact on the viability of the British brewing industry. It is no surprise, as hon. Members from all parties will realise, that as a result of 13 years of Scottish Chancellors, the Scotch whisky industry has not, unfortunately, suffered the same increases in duty as those suffered by the British beer industry. I hope that the new Chancellor and the coalition Government will be more supportive of the brewing industry and our pubs.

It is encouraging that last week the Treasury announced innovative and well-thought through proposals on what I call “smart taxes.” The idea is to increase tax on bad things and reduce it on good things. Reducing taxation on lower-strength beers and spirits and increasing it on higher-strength drinks would support the vast majority of the British brewing industry and help to nudge people—we all know the phrase “the nudge approach”—towards choosing a more responsible and healthy drink when they go out for a tipple on Friday or Saturday night.

We must do something about the change in people’s behaviour and their drinking habits. When I was elected, one of the first things I did was spend a Friday night with the local police in Burton. I was with them from 6 o’clock in the evening until 3 o’clock in the morning. We walked the streets and I went out with them as they dealt with the consequences of people who had had too much alcohol in what the Daily Mail likes to call “Drink-fuelled Britain”.

I am not a young man, but I am not an old man. I remember when I used to go out with my friends for a night on the town, a night on the pull. [Laughter.] We were more successful at drinking than we were at pulling, unfortunately. We would go out for a night on the town and we would probably meet at about 8.30 pm. We would have a couple of drinks and then head to a nightclub to try our luck with the ladies of Dudley. The nightclub would close at 2 o’clock, and that would be the end of our evening.

As hon. Members will know from their own high streets, young people now go out much later. I saw that they were not going out on the streets until 10 or 11 o’clock in the evening and when they arrived, they were already half-cut. As the phrase goes, they had “pre-loaded”. While at home, they drank alcohol that they had bought from supermarkets at cheap prices. That is the heart of the matter and something we must address if we are to offer real support to the pub trade.

While there is a vast differential between the off-sale price and the price at which pubs are forced to sell their drinks, people will always drink at home. If one can buy 24-packs of strong lager, or a can of lager in the supermarket that is cheaper than a can of Coca-Cola, that is the biggest nudge of all.

[Jane Ellison (Battersea) (Con)]

On that point, perhaps I could read out a letter that I received from Mr Geoff Dennis, manager of The Goat in Battersea:

“We have all seen the results of young people ‘pre-loading’ on cheap alcohol in preparation for a night out, which can often lead to alcohol-related crime and disorder and only causes problems that we as pub managers then have to deal with later on in the evening. Below-cost selling of alcohol directly threatens the future of pubs which offer not only a focus for community life but also provide a safe and supervised place…to drink responsibly.”

[Andrew Griffiths]

My hon. Friend and Geoff from The Goat make a point of which we must all be aware. Not only do pubs suffer as a result of the price differential, they have to deal with the consequences. Although Tesco might sell a bottle of Lambrini for £1.90 for the young ladies of Dudley, Burton, or wherever, to drink before they go out, pubs have to deal with the supervision that involves not only the doorkeeper on the door, but those inside who must ensure that they do not serve alcohol to people who are already drunk. Over many years, we have seen the full cost of regulation being borne by the publican, but the supermarkets that have led to much of the unsupervised drinking do not have to deal with any of the consequences.

[Simon Hart]

Does my hon. Friend acknowledge that some supermarkets, including Asda, have changed their policy and introduced minimum pricing and limits? That indicates some positive moves in the right direction.

[Andrew Griffiths]

I thank my hon. Friend for raising that issue. That is true. I have met Asda and Tesco and some of the other supermarkets. It is important to realise, however, that the devil is in the detail. When we talk about below-cost selling, we need a proper definition of what that means. Asda advocates a below-cost selling method of duty plus VAT. That would be the equivalent of a bottle of wine being sold for £1.90 or a can of lager for 42p. I do not know about my hon. Friend, but I think that that is too cheap. If someone can tell me where I can buy a bottle of wine for £1.90, I might be interested to go and sample some of those wares—responsibly, of course.

[Mr Andrew Turner]

I am grateful to my hon. Friend for letting me intervene again. Does he accept that many years ago there were things called off-licences? Off-licences seem to have controlled things rather better than supermarkets. What is different?

[Andrew Griffiths]

My hon. Friend makes a good point. The difference is bulk buying, and the power of supermarkets to drive down the price for the brewers is the crucial factor. Earlier in the debate we heard about the methods used by supermarkets to force down prices paid to our dairy farmers, and we have seen a drastic reduction in the price that they receive at the farm gate.

[Karen Bradley]

The issue is not just the power of the supermarkets in buying, but the fact that they use alcohol as a loss leader to get people into the supermarkets, where they buy other goods. The supermarkets offset the profit that they make on other goods against the loss that they make on alcohol.

[Andrew Griffiths]

As always, my hon. Friend is spot-on. We cannot allow a situation in which the supermarkets are fuelling the phenomenon of binge-drinking, which we see all too often on our streets. I am not trying to hype that or to scaremonger. The fact is that the irresponsible pricing by supermarkets has led to an increase in consumption. The facts speak for themselves. In 1992, 527 ml was the average for alcohol consumed at home; in 2008, that increased to 706 ml. In 2000, 733 ml was the average for alcohol consumed away from the home; in 2008, it was 443 ml. It is cause and effect. Cheap, irresponsible pricing by supermarkets is changing people’s drinking habits and leading to unsupervised drinking.

[Glyn Davies]

I thank my hon. Friend for allowing me to intervene again. I agree absolutely with what he is saying. I have been involved in discussions of this type and I am quite often asked, “Well, what precisely would you do about the issue?” My natural instinct is to oppose the idea of regulation, which leads me, in dealing with the issue of rural pubs and prices in supermarkets, to be a bit reluctant to say, “We’ll just pass a law to enforce this.” I just think that we need to explore what we might be able to do to raise the price charged in supermarkets.

[Andrew Griffiths]

As always, my hon. Friend’s inner conservative core comes through. I do not want to interfere in people’s lives. I do not want to interfere in the pricing, but the reality is that either way, society is paying for the impact of irresponsible pricing by supermarkets. We pay for it in the social toll that it is taking on society, we pay for it every Friday and Saturday night in increased policing costs, and we pay for it in the impact on accident and emergency units throughout the country when people have drunk too much alcohol.

[Rory Stewart]

Would my hon. Friend tax it more? Is that not the way to deal with the matter?

[Andrew Griffiths]

That is a suggestion. I think that with the new coalition Government, there is now recognition that something needs to be done. My right hon. Friend the Home Secretary, in numerous speeches, has made the commitment to ban below-cost selling. My hon. Friend the Member for Leeds North West points out that we were expecting that last week in a Bill. It did not arrive. It is incumbent on us to press the Government to deliver on their promises, but if we cannot come up with a solution—a method for identifying what is below-cost selling that works—we should go down the taxation route. Exploring the idea of an off-sales tax would be interesting. Such a measure would help to level the playing field between the supermarkets, which have no responsibility for the after-effects of drinking, and the pubs, which, in contrast, have to pay for and deal with the implications when people drink too much alcohol.

I will finish my remarks quickly, because I have spoken for some time, but the industry does have to bear a little responsibility. It has not yet coalesced around a definition of what below-cost pricing means. There is an element of interference from Brussels that prevents us from clearly targeting it. I am referring to European competition laws. However, it cannot be beyond the wit of man for civil servants, the industry and retailers to get together and come up with a solution for below-cost selling that takes into consideration the cost of production, that leads to an increase in the price of alcohol on the supermarket shelves and that will begin to redress the balance and support our pubs.

I say to the Minister that although not many Opposition Members are present, there is a strong commitment on both sides of the House to support pubs and to tackle below-cost selling. We look to him not only to do what he can within his area of responsibility in the Department for Communities and Local Government, but to be a pocket rocket for the brewing industry and the pub industry, to be our champion across Whitehall and across Departments to ensure that we can say that this coalition Government, for the first time, did something to help British pubs.

--- Later in debate ---

[Simon Hart]

My hon. Friend reflects my view. The example I cited—and I cited it because I know that everyone has an equivalent example—completely epitomises everything that a local pub stands for. My landlord—my friend, Mr Cole—has probably carried more coffins than the local undertaker. He is a pillar of the community. He is the pioneer of the big society. He started talking about the big society while we were still babes in arms. Somehow, we have managed to get ourselves into a position where all of that is at risk. We have allowed these institutions to be strangled by red tape and regulation. We have allowed them to be strangled by increased alcohol duty and by layer upon layer of increased planning restrictions, which constrict the ability of businesses to grow.

I make a special plea to the Minister: will he spare a thought for those institutions that have to operate in national parks? I have made a few speeches recently that may lead to me being accused of being anti-national park. I am not, but I hope that national parks across the UK see it as their duty to enable good local community institutions and businesses to grow. Their job, in my humble opinion, is not to stop growth but to enable it in a way that is sympathetic to the park.

[Andrew Griffiths]

My hon. Friend makes a very good point. I can give him the example of a hard-working pub in Dartmoor with a small derelict barn, which the landlord wanted to convert to offer more food facilities. The planning application was turned down. An application to knock the barn down was made, and that, too, was refused. The planning regulations are preventing that business from being successful.

[Simon Hart]

I thank my hon. Friend for his intervention. I am afraid that his story is just another in a long line of examples of bureaucracy strangling rural communities. We somehow have to reset the default position that certain planning authorities seem to have, which is: “Whatever it is, the answer is no.” Rural communities are about people. Of course they are also about landscape and buildings, but the landscape and buildings are worth nothing unless there is a rural community to inhabit, embrace and love them.

I will keep my comments brief and conclude with four questions, which may verge on statements. When proposals come along, perhaps through the localism Bill, will the Minister please, please ensure that there is just a little paragraph somewhere saying, “Rural-proof”. If a measure has a downstream implication that may disproportionately affect rural communities, please bear that in mind. The previous Government’s introduction of the concept of rural-proofing was worth while; the only problem was that they did not apply it. It was a good idea that was not applied. The Rural Advocate was a good appointment, but the position was not properly used. The principle behind it is that no matter which Department is passing legislation or why, it should always check how it applies to rural communities down the line. Does the legislation have a disproportionate effect on them? If so, how can we minimise the damage from that disproportionate effect?

I completely embrace the suggested inclusion in the localism Bill of measures to empower local communities to pick up and run with failing pubs. I am tempted to mention a compelling example of that in Penrith and The Border, but I will not because I have a feeling that someone else might. We must stop the inequality between tenants and freeholders—the beer tie has been mentioned. We must overhaul the licensing system and temporary event notices, which were mentioned by my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), and we must reform the planning system to enable co-location of other services that local communities need and that landlords and their families might wish to introduce.

I should give a big thumbs-up—we should probably say “bottoms up”—to two pubs. The Jolly Farmer in Reigate was able to overcome all obstacles to create a food emporium, which is available to the community as long as the pub is open. It competes with supermarkets on opening hours, and is doing fantastically well. It has tremendous local support and has focused a little attention on the supermarket competition in the area. The Plough in Wigglesworth, Skipton, confronted the problem of a closed post office by converting its old taproom into one, thus enhancing the role of the pub in that area.

Many hon. Members have made important speeches in this important debate about the value and future of the local pub. That is why I want to restrict my speech to just the far-distant corners of Britain, where the pub is more than just a convenient place to go for a pint, and where its closure is a great deal more than a minor inconvenience.

--- Later in debate ---

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Benton. I congratulate the hon. Member for Leeds North West (Greg Mulholland), who has a passion for the pub, on initiating this debate. I also congratulate the hon. Member for Staffordshire Moorlands (Karen Bradley) on putting a powerful case for the pub. I agree strongly with the hon. Member for Penrith and The Border (Rory Stewart) that one of the great strengths of Westminster Hall debates is that they enable us to focus on what matters to communities all over the country. Pubs are the centre of such communities. I congratulate the all-party save the pub group and the all-party group on beer.

This has been a fascinating debate, with esoteric contributions ranging from the Churchillian to tales of misspent youth, but all contributions have pointed in the same direction. They have recognised that responsibly run pubs are the hub of local communities all over Britain, provide a safe and sociable place for people to go, including with their family, and are the centre of local community activities. Pubs are a quintessentially British institution.

The Lad in the Lane in my constituency is one of the oldest pubs in Birmingham. Anyone who goes there on a Sunday morning will know how wonderful it is to see the pub packed with families out for a good day together. At The Bagot Arms, one can see workers from the local industrial estate, including from Jaguar Land Rover. The Yenton is one of the oldest pubs in the Erdington area. The New Inns, which takes me back to my misspent youth in Irish pubs in Kilburn, is a great pub for a great night out. I have long had association with other institutions related to the pub industry, including the Workers Beer Company.

Some 27% of adults go to a pub once a week. The economic impact of pubs and the pub industry is massive, contributing £28 billion to our economy. The benefits for the Exchequer are enormous: £1.14 for every pint drunk in a pub, compared with 55p per pint drunk at home. Therein lies a problem to which I will return later. The pub industry directly employs 540,000 people, and 380,000 are employed in associated trades. I know from my experience as deputy general secretary of Unite that the industry employs excellent people, from brewery workers to members of the National Association of Licensed House Managers, which became part of the old Transport and General Workers Union. Moreover, 90% of what is sold in pubs is produced in the UK. Pubs are good news for our economy as well as being the centre of our communities.

The hon. Member for Leeds North West has said on previous occasions that Britain’s biggest pastime is going to the pub. In terms of tourism, every year, more than 13 million people who come to our shores visit pubs. Our Government took some welcome steps—but. The welcome steps included enabling pubs to spread the payment of the inflation uprating of business rates over three years. The business payment support scheme run by Her Majesty’s Revenue and Customs benefited many pubs, and other support was given through low-cost loans and advice on energy efficiency that enabled many pubs to save on energy bills. But—let me be the first to acknowledge it—the simple reality is that since the 2008 Budget, 3,500 pubs have closed, and it is estimated that the pub industry will lose 112,000 jobs by 2012.

The hon. Member for Burton (Andrew Griffiths) put it well when he said that all parties went into the 2010 general election recognising both how valuable pubs are and that those in the Government must act. My right hon. Friend the Member for Wentworth and Dearne (John Healey) spelled out three aspects, in particular, of a 12-point plan. The first was a £4 billion programme of business support, including help for communities to buy into local pubs. The second, crucially, was a strengthening of councils’ powers to intervene to allow communities a greater say, including about change of use, and a planning regime that facilitated and encouraged pubs to branch out, as has been discussed in this debate, into everything from selling stamps to becoming gift shops. The third was our support for the position—on which the hon. Member for Northampton South (Mr Binley), with whom I have had the pleasure of working over the years, admirably led—taken by the Select Committee on Business, Innovation and Skills, when it identified the problem of pub tenants with beer ties having to buy everything from pubcos and recommended greater freedom for tenants to buy local to support local economies. We were right to support the Select Committee’s message that if the industry did not clean up its act, legislation would be necessary.

[Andrew Griffiths]

The hon. Gentleman is describing all the things that the previous Government did to support the pub industry and the brewing trade. Does he think that increasing the duty on beer by 60% was a positive or negative thing to do?

[Jack Dromey]

I have acknowledged that the increase in duty contributed significantly—although it was not the only factor—to a trend that led to 3,500 pubs closing.

There is a range of threats ahead of us. If the economy has a rocky year in 2011, that is likely to exacerbate the trend of stay-at-home drinking. The combination of reduced consumer spending and ever-rising costs—including the VAT increase from January 2011—is bound to have an impact. So, too, is the continuing trend, of which we have seen evidence in the past 12 months, of pub prices rising slightly while prices in supermarkets fall. Below-cost selling is a growing threat.

To return to what the hon. Member for Burton rightly said, there is substantial common ground in this debate. We would like to work with the Government on a range of issues, which I shall identify. First, action is necessary on below-cost selling, and that includes having an adequate definition of what that is. It is true that Asda has taken welcome steps in the right direction. My experience of Asda is that it has acted in a socially responsible way on other issues as well, including on labour market standards in its supply chain. I welcome that. Having said that, I find it hard to see how to deal with this issue other than through Government acts. If the industry is incapable of dealing with the issue, the Government will have to act. The hon. Member for Penrith and The Borders was right when he said—he did not say it in this way, but I will put it in my own way—that he hoped that hon. Members would not get out a clove of garlic in one hand and a cross in the other at the very mention of regulation.

That was my first point. Secondly, will the Minister respond to the comments from the excellent CAMRA on the differential rate of duty imposed on on-sales and off-sales? Thirdly, given that the sale of food is becoming ever more important in pubs, does he recognise that the increase in VAT from January 2011 comes at a difficult time for the pub industry and will have an impact? Fourthly, I think that there is a case for the late-night levy, but only 2% of pubs and clubs have late-night licences. The big problem is the 44,000 hotels, the 1,700 supermarkets, and the sale of below-cost alcohol. Pubs often have to deal with the consequences when people arrive already having boozed. We are in favour of the late-night levy, but pubs are entitled to feel aggrieved about the impact that it sometimes has on them.

Fifthly, the planning regime is crucial in the ways that I have addressed, and I hope that the Government will act on that. Sixthly, on the crucial issue of beer ties, we would like to propose a pub summit that would bring representatives of the industry together. We should tell the current beneficiaries of beer ties that if they are unable to change an unacceptable practice that is having serious consequences for those who run pubs up and down the country, the Government will act.

There was one point made in the debate that I think should be disregarded. It was absolutely wrong to resurrect the issue of the smoking ban. I say that for numerous reasons, but in particular because, having represented the union members concerned, I knew people who contracted cancer and died as a result of working in licensed premises. I think that that debate should rightly remain closed as we move on. In conclusion, the Minister is a man who is giant in stature. I know that he has heard the contributions from all parties represented here today, and I hope that he will respond positively.