As Rachel Reeves prepares to present her Budget to the House of Commons, one crucial issue deserves urgent attention but is often overlooked: the preservation of the British pub industry. While significant debate will undoubtedly focus on pressing matters like the winter fuel allowance, the decline of British pubs is also a vital issue, deeply intertwined with our cultural heritage and communal life.
Pubs have been a cornerstone of British society since Roman times. Originating as taverns, where travelers could rest and refuel, many historic pubs remain to this day, standing as testaments to Britain’s enduring culture. For instance, the Ye Olde Trip to Jerusalem in Nottingham, established in 1189, is one of the oldest in England. In Birmingham, my home city, the Old Crown has been serving patrons for over 650 years. Many pubs we frequent today are well over a century old, each carrying with it a rich legacy. British pubs are far more than hospitality venues – they are custodians of local history, heritage, and community.
Pubs serve as essential community hubs, a unique role that spans across generations and backgrounds. Pubs plays unparalleled roles in our lives: they bring people together in a way few other establishments do.
Yet, this cherished institution is under threat. Since the 1980s, pubs across Britain have been closing at a startling rate. In 1980, the UK was home to around 69,000 pubs; by 2021, this had fallen to just 46,350. In 2023, the Campaign for Real Ale (CAMRA) reported that 1,293 pubs were closed, with 194 historic pub buildings demolished, while only 293 new establishments were opened. Many communities now face the reality of losing one of their last remaining pubs, diminishing the social fabric that binds them.
While economic challenges, including the impact of COVID-19 and the cost-of-living crisis, have certainly contributed, government policies are exacerbating the industry’s decline. There is a stark imbalance between how on-sale and off-sale alcohol markets are treated in terms of tax policies. Pubs, which sell alcohol on-site, are required to pay 20% VAT on food and drink, whereas supermarkets, which sell alcohol off-site, enjoy a VAT exemption on these products. This discrepancy drives up costs for pub patrons, undermining local economies and disproportionately affecting the hospitality sector.
Rachel Reeves must address this disparity in her upcoming Budget. Reducing VAT for pubs would provide relief to an industry that, in turn, supports local communities and economies. Additionally, an increase in alcohol duty would be a further blow to the struggling pub industry. Past rises in duty have led to price hikes, reduced sales, and a subsequent drop in tax revenue. According to Miles Beale, CEO of the Wine and Spirit Trade Association, this has resulted in an estimated revenue loss of £1.3 billion. Freezing alcohol duty would alleviate financial strain on pubs, promoting their longevity rather than contributing to their decline.
Raising alcohol duty also fails to promote public health; Professor Robin Dunbar in 2016 found that regular pub-goers report higher happiness, greater trust, and a stronger sense of community connection. However, while harmful drinkers generate 32% of alcohol-related revenue in the off-sale market, they account for only 17% in the on-sale market, where pubs operate. We might highlight the societal benefits of responsible pub-going, and the irreplaceable role pubs play in promoting social well-being.
The preservation of British pubs is not only an economic imperative but also a cultural one. By reducing the VAT disparity and freezing alcohol duty, Reeves can offer British pubs a lifeline, and give British Pubs a Better Deal.
