Contribution
It is a pleasure to speak with you in the Chair, Mrs Hobhouse. I congratulate the hon. Member for Meriden and Solihull East (Saqib Bhatti) on securing this important debate.
I will begin by mentioning two people I represent. Becky runs the Red Lion in Eynsham. She met the Under-Secretary of State for Business and Trade, the hon. Member for Halifax (Kate Dearden), at my invitation earlier this year. That followed a question in the House, so some Members present, including the Minister, who is smiling, may already know Becky’s story. Her turnover is up, but her profits have vanished. She said that there is
“no living to be made any more”
from her rural pub. Think about what that means: the customers are still spending, yet she is squeezed to the point of asking herself whether to carry on at all.
Donna runs the Oxfordshire Yeoman in Freeland. She has faced the uncontrollable in the last few months: a washout summer, when summer trade is the very thing that a rural pub banks on to survive the winter. Stacked on top of that, she has faced the entirely controllable: a 50p minimum wage rise, soaring energy bills and rising water bills, all landing at once.
When landlords are counting every penny and customers are counting every penny on the same evening, that is not a market finding its level but a trade being hollowed out from underneath. Consider the scale of the loss: 161 pubs closed across England, Scotland and Wales in the first quarter of this year alone, which is more than two a day. Those closures took roughly 2,400 jobs with them. There is a huge difference between losing a pub in a city and losing one in a village. When an urban pub closes, a community loses an option, but when a rural pub closes, a community loses its social space, which almost never comes back. The rural pub sits alongside the church and the village hall as part of the fabric of some of our smaller communities. Such closures represent a loss of identity and cohesion in communities such as mine. We should ask, “Why is the rural pub more exposed?” They tend to have lower footfall, they tend to face higher energy and supply costs, and it is far harder for them to diversify their income. Running costs across hospitality are up around 43% since 2019, and one third of those businesses are operating at a loss.
I would like to turn to what might actually help. First, there is VAT and energy. Becky’s case is one of simple fairness. Why should British hospitality pay roughly double the VAT of comparable European countries? The Liberal Democrats would cut VAT on hospitality by 5% until April 2027 now—not after yet another review—and remove the main renewable levy from energy bills, taking more than £90 a year off the typical bill, funded by a windfall tax on the banks. Taken together, that is £270 back in the pockets of the average household over 18 months, allowing them more opportunity to buy a pint or a meal in their local pub.
Secondly, there is the issue of business rates. In January, the Government discounted 15% of the planned rate hikes for pubs, but Becky’s rateable value was hiked phenomenally before the freeze arrived, locking the damage in. The relief does nothing for shops, restaurants, cafés and the wider high street. Our ask is straightforward: the Government must deliver the full 20p discount promised to all retail, hospitality and leisure businesses. In the interim, they should keep the 75% relief and freeze the small business multiplier.
Before I end my remarks, I wish to refer briefly to the role of small breweries in our communities, such as Tap Social Movement in Kidlington, Little Ox in Freeland or Twisted Tree in Tusmore. Those small and medium-sized enterprises in the community combine a passion for independent brewing with a commitment to creating local jobs. However, in addition to the impact of pub company ties on landlords, the large brewers are locking small breweries out of our village pubs. Fewer than 40% of local pubs are open to small, independent breweries. Will the Minister encourage Ministers in the Department for Business and Trade to consider that barrier to market access? As part of the current pubs code review, will they consider a guest beer arrangement in England and Wales similar to that in Scotland?