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Why Britain’s dying pubs threaten to give Labour an almighty hangover

Rachel Reeves on the campaign trail at The Humble Plumb in Southampton
Rachel Reeves has unveiled a five-point plan to save UK pubs - Darren Fletcher/News Group Newspapers

After 17 years of running pubs, Joe Cussens realised his time behind the bar was up when his energy bills went through the roof in the wake of the pandemic.

Facing the prospect of paying tens of thousands of pounds more was “like having a gun put to the head”, he says.

“I thought, ‘This just is not going to get any easier’.”

Cussens, who with his business partner had grown their company from a solitary pub to a successful group of four across Bath over almost two decades, sold the company to the Cornish St Austell Brewery last year.

“We took it from a single pub that was on its knees, turned it around, and we did that a number of times,” he says. “Overall, the good times definitely outweigh the bad times.”

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However, surging bills left him asking himself: Is there enough return in it for the risk that we are putting ourselves through?

“They were busy pubs – we were turning over £6m at the end – but we were struggling to make it stack up because the cost had just become eye-wateringly high,” he says.

While Cussens, who now works as a consultant, managed to secure a future for his pubs by finding a new owner, swathes of publicans across the UK have not been so lucky.

The number of pubs vanishing across England and Wales soared to 239 in the first three months of 2024, rising 56pc compared with the same quarter last year, according to recent figures compiled by advisory firm Altus. This was equivalent to around 80 a month.

The rising tide of closures has caught the attention of the Labour Party, which is making a final push to win over business owners ahead of its expected electoral victory in July.

As news of closures made the headlines, Rachel Reeves was pictured pulling pints of ale at The Humble Plumb in Southampton.

Hailing pubs as an “important institution”, the shadow chancellor unveiled a five-point plan to save Britain’s dying boozers, promising to “turn the page” for the industry and claiming closures were “symbolic of the decline under the Tories”.

Labour has promised to reform business rates as part of the plan, introduce community “banking hubs” it claims will help pubs whose punters want to pay in cash, bring down energy bills with its planned Great British Energy company, and crack down on anti-social behaviour.

On top of this, it wants to introduce a “right to buy” for communities to take control of beloved local pubs that have been designated assets of community value, strengthening the ability of locals to take pubs on under existing legislation.

In an interview with The Sun, she also hinted at a freeze to beer duty.

While stressing she would not make any “unfunded commitments”, she said: “I have always supported cuts and freezes in duties when those have come to Parliament and I would want to make it as easy as possible for pubs to carry on operating on our high streets.”

Pub closures have caught the attention of Sir Keir Starmer who is making a push to win over business owners
Pub closures have caught the attention of Sir Keir Starmer who is making a push to win over business owners - Stefan Rousseau/PA

Industry bosses have broadly welcomed the plans, particularly Labour’s promise to reform hated business rates, which publicans have long argued unfairly penalised them and other small businesses on the high street.

But there are doubts about whether the package will be enough to fix the raft of problems faced by Britain’s pubs.

“Anybody who wants to go around and say they will save the pub industry needs to spend a lot more time looking at the commercial realities of what it’s like to run a pub, to understand that the pub industry is full of operators who are working at or below minimum wage,” says Cussens, who worries that the five-point plan amounts to a “gimmick”.

Pubs have been left reeling by a combination of soaring bills and lower visitor numbers in the wake of the pandemic.

Bigger chains had the financial heft to weather inflation. Many are now benefiting from a rebound in business as people return to the office and socialise more.

However, those benefits have not been felt across the board.

“During the pandemic, Rishi threw loads of money at everyone, which was very helpful and very appreciated, but we knew that a year or two after was going to be the reckoning because we’ve not quite got back to pre-pandemic trading levels,” says Nic Sharpe, director of the St John’s Tavern in Archway, north London.

Mr Cussens says: “When I first went to pubs back in the 80s, they were mobbed. You’d go in and it’d be full of people on a Friday or Saturday night trying to spend their money.

“It’s a completely different landscape now. The best you could do for home entertainment was to get a blurry VHS from your local corner shop, but now pubs are competing with the home entertainment market where you’ve got fantastic TV, movies, and great takeaways.

“You’ve got to drag people out.”

British pubs aren't what they were in the 1980s, according to former publican Joe Cussens
British pubs aren't what they were in the 1980s, according to former publican Joe Cussens - Trinity Mirror/Mirrorpix/Alamy Stock Photo

At the same time, the cost of everything from energy to ingredients and wages has soared.

“The fixed costs just continue to get loaded on you,” Sharpe says. “We seem to be firefighting on every level.”

Energy bills are a particular problem. Greg Mulholland, a pub campaigner and a former Liberal Democrat MP, says: “The incoming government must take action to stop the grotesque profiteering of the big energy companies and stop rip-off bills and unfair energy contracts, which are single-handedly forcing many publicans out of business.”

Labour wants to address this with a windfall tax on energy companies and the founding of its new “Great British Energy” company.

But the savings from this new institution are contested and, if they do materialise, they will take time – something many pubs do not have.

“I’ve got so many friends that have had places close,” says James Ratcliffe, owner of The Black Bull in Sedbergh, on the edge of the Yorkshire Dales.

“It’s becoming more and more difficult. As things catch up with people over the next year, you’re going to see a lot more places closing and a lot more places become unviable.”

The Black Bull in Sedbergh, Cumbria
More than 230 pubs closed in the first three months of this year – equivalent to around 80 a month - Julia Gavin/Alamy

As well as energy bills, hospitality bosses have warned that the recent rise in the National Living Wage from £10.42 to £11.44 has heaped pressure on at a time when many hospitality firms are already on the edge.

A long-running shortage of skilled staff has added further upwards pressure on salaries and wages.

“The industry, rightly or wrongly, for many years survived on cheap labour,” says Cussens. “I think it’s a good thing that that’s changed, but it’s meant that the business owners have had to spend a lot more on wages.”

These issues have left many pubs in desperate need of some kind of relief. And while Labour is promising just that, some have their doubts.

Simon Emeny, the chief executive of Fuller’s, worries reform to business rates would end up “in the ‘too difficult’ box” no matter who takes power.

Previous Conservative governments pledged to change the system but ultimately kicked plans into the long grass.

At the same time, while offering pubs to the community is an appealing solution in theory, there are doubts as to how often it will be taken up in practice.

“It’s a nice idea, and there is value to their community – and their house price sometimes – of keeping the pub open. But when it comes to it, it’s quite complicated to get the money together and run it,” says a pub industry executive.

In the meantime, more and more pubs are on the edge as their owners ask themselves whether it is worth continuing.

Simon Emeny, the chief executive of Fuller's
Fuller's boss Simon Emeny worries that reform to business rates will not materialise - Eddie Mulholland

“People are working and working, every hour that god sends, and they’re not getting the return from it,” says Ratcliffe.

For Sharpe, the most important thing is levelling the playing field so there is an incentive for people to keep opening and running pubs, which he believes are vital to local communities and high streets.

“We are overtaxed and overburdened and over-regulated,” he says. “I don’t want handouts from the Government.

“I want a fair structure which I can be competitive in and live and die by my merits.”

Barring a historic upset, Reeves and her colleagues will be popping the champagne come July 5. But the shadow chancellor could face an almighty hangover if she fails to keep the pints flowing as promised.