Press release

Package of support for the Great British pub

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A package of measures to support ‘community ownership’ of valuable local pubs.

Community Pubs Minister Kris Hopkins has today (11 November 2014) announced £50,000 of extra funding for the Plunkett Foundation which runs a telephone support line for communities who fear their pub might be under threat.

The community enterprise experts advise on how local people can set-up a cooperative to take over the running of their local pub.

A helpful guide was also published by Pub is the Hub, another organisation funded by the department, to help local people to take ownership of their beloved pub and revitalise these important assets on behalf of the wider community.

This guide sets out the further options open to local people looking into taking over their community’s pub.

This government has already abolished the unpopular beer and alcohol duty escalators, cut business taxes for pubs and given communities the right to protect their local from closure by listing it as a community asset.

Today the minister revealed the number of pubs protected thanks to communities’ use of their Right to Bid had passed the 500 milestone.

He was visiting West Yorkshire’s first co-operatively run pub, the Fox and Goose in Hebden Bridge, where he heard how the community clubbed together and bought the pub after its landlady fell ill.

The pub, which dates back to 1702 and supports a string of small craft breweries, was bought with contributions from some 262 local people and is once again a thriving pub.

Mr Hopkins said:

The Great British pub is a national treasure playing a crucial role at the heart of our communities, while providing thousands of jobs and boosting the economy by £21 billion a year. A lot of hard work has been put in by communities up and down the country to protect their beloved local from sell off and I am delighted we have passed this latest milestone of 500 pubs being afforded protection.

Their efforts have been backed up by terrific support from organisations like Pub is the Hub and the Plunkett Foundation whose advice line, supported by the government, provides a wealth of advice and information for communities looking to take over their local. This is helping to create a growing number of thriving co-operative businesses run by and for the local community.

Further information

Pubs are an extremely important asset for this country. They are significant contributors to the economy and provide many local jobs. Each pub contributes £80,000 to its local economy and the industry as a whole sustains some 900,000 jobs.

They are also important sources of social value, providing real local hubs that strengthen community relationships and encourage wider social action.

The government wants to help to protect local pubs where they are seen to be important community assets and to ensure that they are working in the best interests of the communities they serve. There are a range of policies designed to support this aim.

Beer Tie / Industry Code

Following a consultation over the summer of 2013 by the Department for Business, Innovation and Skills on a statutory code of practice for pub companies, the government is changing the law to establish the statutory code.

The new Code, presently on its passage through Parliament as part of the Small Business, Enterprise and Employment Bill, will address the imbalance in bargaining power between pub owning companies and the 20,000 or so tenants that run tied pubs across England and Wales, who are often sole traders and small businesses, to ensure tenants are treated fairly by their pub owning company.

Budget 2014

The government cut the tax on a typical pint of beer by 1 penny at Budget 2013. However, given that nearly two-thirds of alcohol sold in pubs is beer, the government has now taken a further penny off the tax on a typical pint of beer to help the pub industry.

This means that a pint of beer will be 8 pence cheaper than under the previous government’s duty plans.

To ensure help also extends to those pubs that have diversified away from beer, duties on spirits and most cider have been frozen, and the duty escalator on wine has ended.

There is a business rates discount of up to £1,000 in 2014 to 2015 and 2015 to 2016 for retail properties with a rateable value of up to £50,000, which will benefit three-quarters of all pubs.

Employer National Insurance contributions will also be abolished for under-21s earning below £813 per week from April 2015.

Evidence from the British Beer and Pub Association shows that pubs will particularly benefit from these changes as 75% of pubs have a rateable value of up to £50,000 and 46% of pub employees are aged 16 to 24.

Community Right to Bid and community shares

The Community Right to Bid (assets of community value) is now in force giving community organisations a better chance to save their local pub.

The Ivy House in Peckham was the first pub to be listed and achieve a successful community buy out. This occurred in March 2013 and since then over 500 pubs have been listed as assets of community value, a figure strongly assisted by CAMRA’s ‘List Your Local’ campaign.

A package of support including the provision of information, tailored advice, guidance and funding is available to help community groups navigate and exercise the rights.

The department has funded the development of a Community Shares Unit, with Co-ops UK, to grow the community shares market. The use of community shares for social enterprises, co-ops and mutuals has already proven to be effective in helping communities take over local pubs.

Industry funding

The department is providing £170,000 funding for Pub is the Hub over 2013 to 2014 and 2014 to 2015 to enable them to help an estimated 30 pubs to become more sustainable through diversification into new service provision.

Over the same period we are also providing £30,000 for a co-operative pubs advice line, run by the Plunkett Foundation, which will bring more pubs into community ownership, many of which may otherwise have closed. The money announced today brings the total funding for the Plunkett Foundation to £80,000.

Plunkett Foundation’s advice line has received a far higher volume of enquiries than expected. As a result, the number of co-operatively owned pubs has more then doubled from the start of 2013 to the present figure of 30.

Business rates

At the Autumn Statement on 5 December 2013 we announced that we were extending the doubling of small business rate relief for a further year, until April 2015, making 4 and a half years in total.

The government also announced a £1,000 discount in 2014 to 2015 and 2015 to 2016 for retail premises, including pubs, with a rateable value of up to £50,000.

Furthermore, we have capped the Retail Price Index (RPI) increase in business rates bills to 2% in 2014 to 2015 - businesses were expecting a 3.2% rise.

There is now a reoccupation relief for 18 months with a 50% discount for new occupants of retail premises empty for a year or more.

Businesses may now pay their business rates over 12 months (rather than 10), which will help every firm with their cashflow.

Corporation Tax/National Insurance

Changes in Corporation Tax and National Insurance (making it cheaper to employ people on incomes below £21,000) will benefit pubs.

National Planning Policy Framework

The National Planning Policy Framework makes clear that to deliver the social, recreational and cultural facilities and services that communities need, planning policies and decisions should seek to cover the provision and use of community facilities, such as pubs, and guard against their unnecessary loss, particularly where this would reduce the community’s ability to meet its day-to-day needs.

Loss leading in supermarkets and other licensed premises

Since May 2014, there has been a ban on the sale of cheap alcohol at ‘below cost’, which is taken as duty plus VAT, which applies to all licensed premises.

Live music licensing reforms

We have reformed licensing rules to make its easier to play live music in local pubs. The Live Music Act 2012 came into force on 1 October 2012 and removes the usual licensing rules from concerts where the audience numbers 200 or fewer.

Red tape

The government has, through the Red Tape Challenge, stripped away over-burdensome and unnecessary red tape holding back individuals and businesses and impairing their effectiveness.

Among the measures effecting pubs are a redesign of licensing forms, revoking smoke free sign regulations and rationalisation of rules around weights and measures.

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