The Future of Pubs

Jack Dromey Excerpts

Thursday 9th December 2010 Westminster Hall

[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.