Crocodile tears for pubs

It’s noticeable how, when an election comes around, politicians suddenly discover an interest in pubs that had been notably lacking in the preceding years. The latest example of this comes from the Labour Party, who have proposed a policy to “give communities a new ‘right to buy’ shuttered pubs.”

It must be said that this is a bit rich coming from the party responsible for the smoking ban and the alcohol duty escalator, and which in the first term of the Blair administration, proposed to cut the drink-drive limit, although that was fortunately kicked into touch. They also consistently demanded longer, harder lockdowns and opposed the full reopening of pubs in July 2021.

However, setting that to one side, what would such a plan involve? Local communities already have the right to put in a bid for pubs that have been declared an Asset of Community Value, and where the owner is proposing to sell them off for alternative use. However, there is no obligation to accept such a bit.

This would seem to beef that up by extending it to pubs that are long-term closed, but where there is no intention to dispose, and potentially to include some degree of compulsory purchase. It has some elements of the idea I postulated in a post about the hard realities of pub closures last year.

It would, of course, be possible to go one step further by requiring any owner wishing to dispose of a pub to at first offer it for sale valued as a going concern for, say, a period of six months. However, this would simply tend to lead to owners closing pubs and sitting on them until any prospect of them appealing to alternative buyers had evaporated. Humphrey Smith is an expert at keeping pubs closed for years at a time. There would have to be a qualifying time period, as otherwise if your micropub in a converted shop failed to prosper, it would be much more difficult to change it back into something else. Plus there would be the question of who would eventually receive the development gains if, after one or two more throws of the dice, it did not prove possible for it to operate as a pub. Realistically, all this would do is to prolong the agony.

There are a number of key questions that need to be asked about this proposal:

1. How long would a pub have to be closed for this to come into play?

2. Would a pub have to have been previously open for a minimum length of time for it to apply? Surely it wouldn’t cover a micropub that had closed after nine months’ trading.

3. How would the sale price be assessed?

4. Would groups who expressed an interest be expected to put down a deposit to demonstrate serious intent, to avoid frivolous applications jamming up the system?

5. How long would groups be given to raise the funds?

6. Would there be a requirement that the premises should be operated as a pub, rather than for some other community purpose?

7. Who would profit if it proved unsuccessful as a pub and ended up being redeveloped as housing?

For a pub to be open to a community buyout, there has to be a group of people with both sufficient means to put up the funds and a strong identification with that particular pub. In practice, this will tend to restrict it to affluent villages and suburbs. Very few high street, estate or inner-urban pubs are likely to command such loyalty.

If a pub is long-term closed, it will be because its owner wasn’t able to make a go of it. It may be the case that it will do better under community ownership, either because the cost structure is lower, or because a different trading formula is more successful, but that is by no means a given.

The question of future development rights is crucial. If there is a possibility that a pub may be subject to compulsory purchase at below its open market value, and the owner loses all rights to it, that amounts to expropriation of property. It’s conceivable that, if this scheme gets up and running, pub owners will keep pubs open on a “Parliamentary train” basis, with very limited opening hours and offer, to prevent them being snaffled from under their noses.

In any case, even if this policy becomes reality, I would expect it to have very little impact and only cover a handful of examples. It’s just headline grabbing, and no magic bullet for the pub trade. As I said last year, ultimately, the shadow hanging over pubs is not one of lack of supply, but lack of demand. If you want them to survive and prosper in future, you would be better off spending your time promoting the appeal of both pubs and moderate social drinking, rather than engaging in a constant rearguard action of fighting planning battles.

For what it’s worth, I’m not saying that any other party has better policies for pubs, just looking at the implications of this particular one. And I would suggest the best thing for pubs is to be left alone by government, with no new taxes or regulatory burdens.