Government ‘turmoil’ threatens great British boozer

Industry leaders and representatives of small businesses have said that the future of British pubs and other SMEs has been left on a knife's edge by turmoil from the UK Government, and they are now facing a situation that is ‘worse than Covid’. 

In a public evidence session to the MPs and business leaders of the UK Trade and Business Commission this morning, trade and industry experts detailed how the pub and brewing sector, already badly hit by Brexit red tape and the pandemic, are facing ‘unbearable’ conditions amid changes to the government’s energy support package, the cost of living crisis and damage to consumer confidence from political turmoil. 

The British Beer and Pub Association confirmed that around a dozen bars are closing their doors every week and that the survival of many British pubs will depend on the success of England and Wales at the upcoming football World Cup. Many have already reduced opening times to cut down on soaring energy costs, which they say are still two and a half times higher even after the government announced their time-limited support. The sector was already struggling from acute labour shortages caused by Brexit.

In the same session, the British Retail Consortium said that the last 6 weeks of political chaos had damaged consumer confidence at the time of year when businesses expect to make the lion’s share of their revenue. The Federation of Small Businesses added that SMEs had entered a “survival phase” as 43% of their members have reported that revenues are down while 89% say costs are up with 38% saying their costs are rising higher than inflation.

The cross-party commission are calling on the government to increase support for SMEs in the upcoming autumn statement on 17th November to quell the “abject terror” gripping the sector. Echoing the witnesses at the session, they are further calling on the government to reconsider immigration policy to address labour shortages which have particularly affected the hospitality sector since Brexit.

Josh Green, Head of Public Affairs at the British Beer and Pub Association, said: 

“This is worse than Covid. This is an acutely difficult time to be doing business. We don’t know what is going to happen after this initial 6 month support package.

“The World Cup complicates matters…there’s no guarantee that England will progress in the tournament, if they were to be eliminated early along with Wales there would be a massive net negative impact.”

“10-12 pubs a week which are closing. Only a third of our members are able to turn a profit at the moment…If our members are going to look at 2023 with anything other than abject terror, then I would hope that the government will look at some of these short term interventions that will directly support what is the backbone of so many communities.”

Craig Beaumont, Chief of External Affairs, Federation of Small Businesses, said:  

“There is a cost of doing business crisis. 

“We’ve lost 500,000 people from the labour market…we need sensible reforms to immigration policy…We’re supposed to have these youth mobility schemes which should be agreed with the EU, and we can’t have skilled worker visas pricing out people.”

Helen Dickinson, CEO of the British Retail Consortium said:

“The general turmoil in the political discourse is not good for consumer confidence.

“It is the golden quarter; many retailers make their money in the next 3 months…What happens right now and in the next 6-8 weeks is really vital for many businesses, so building back that confidence, enabling consumers to feel a level of certainty about the future is the most important thing for the industry as a whole.”

Hilary Benn MP, who chaired this session of the Commission, said:

“Pubs are at the heart of our communities across the country and after months of infighting the government has completely failed to provide certainty or support for businesses struggling with challenging economic conditions and the staffing consequences of Brexit.

“The Prime Minister must ensure that SMEs are supported in the  autumn statement and that barriers to businesses getting the staff they need are removed or more will go to the wall.”