Latest grants ‘sticking plaster’ for pub sector

Chancellor of the Exchequer Rishi Sunak revealed earlier today (Tuesday 5 January) that further grants will be based on rateable value​. For pubs with a rateable value of £15,000 or under, funding will be up to £4,000.

Those with a rateable value of between £15,000 and £51,000 can claim £6,000 and for those with a rateable value of more than £51,000, a grant of £9,000 can be claimed.

This followed Prime Minister Boris Johnson’s announcement yesterday​​ (Monday 4 January), putting the country into a third lockdown until mid-February in a bid to control the spread of coronavirus.

The new rules become law in the early hours of tomorrow (Wednesday 6 January) morning, Johnson said in a televised address to the nation.

Beer & Pub Association (BBPA) chief executive Emma McClarkin said: “We welcome this much-needed support from the Chancellor, worth £277m to UK pubs. It is the lifeline we have been campaigning for to save our pubs and help them survive through to the spring. 

“Without this support, pubs across England were at real risk of being lost for good at the beginning of this year. We had been anticipating permanent closures in the very short term without it."

Long-term support

McClarkin added: “Given that the future of so many pubs hang by a thread, it is essential the Government delivers these grants to pub businesses immediately. If the grants take weeks or months to get to the pubs they are meant for, it will be too late. We stand ready to work with Government and local authorities to ensure the grants are delivered at pace. We also need confirmation from Government that the new state aid rules will allow businesses access to these grants.   

“The grants will mean many pubs may now be able make it through until spring. The Government now must also provide the same levels of support to brewers who have suffered months of closure of a major trading channel in pubs, but are not eligible for the support announced today. 

“In the coming months, the Government must also share how it will help our sector to play a leading role in the economic recovery when it can reopen, by extending stimulus support such as the Business Rates holiday and VAT cut, along with further initiatives including a beer duty cut. The sooner we hear of the long-term support for the sector the better.” 

In response to the Chancellor’s announcement this morning regarding further financial support for businesses, UKHospitality (UKH) chief executive Kate Nicholls cautiously welcomed the funding.

“This is obviously a very positive step to keep businesses afloat in the immediate term and, for that reason, must be welcomed," she said.

“The Chancellor has rightly recognised the costs imposed on hospitality businesses by enforced closures and the need for additional support. It is also encouraging that the discretionary grants address the suffering in the supply chains upon which our sector is reliant.

“However, while this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector. To address the inevitable and existential challenges that hospitality faces, we need confirmation of extensions to the business rates holiday and of the 5% VAT rate.

“On its own, today’s support is not enough. Businesses need a longer-term economic plan and it would befit the crisis that we face if the Chancellor brought forward his Budget to make the announcements necessary to reassure businesses and allow them to plan their survival. Commercial certainty cannot come soon enough and only the Chancellor can deliver it.”

Devastating blow

Campaign for Real Ale (CAMRA) chairman Nik Antona echoed repeated calls for further financial support for the sector.

“The national lockdown is yet another devastating blow for an already struggling industry, which follows hot on the heels of nearly a year of restrictions, curfews and forced closures," he said.

“It is clear now more than ever that the Government must introduce a new, long-term and sector-specific financial support package to help these businesses survive the coming months. While one-off grant support is welcome, it is nowhere near enough to cover the haemorrhaging costs for pubs and breweries that don’t see any end in sight. 

“What is particularly concerning in the latest announcement has been the confusion around whether pubs will be able to operate on a level playing field with supermarkets and off licences during this lockdown – as they have been able to previously. Takeaway sales, in sealed containers, for people to take home, were a real lifeline for the trade in previous lockdowns and restricting that route to market now would be a death knell for many pubs. This will once again provide an unfair advantage to supermarkets and off-licenses that don’t face similar restrictions. “

He emphasised the important role pubs play in communities and called upon the Government to recognise this.

Antona added: “When this nightmare is over, they will be vital to the nation’s healing process – so long as they are still standing. 

“A new, dedicated and decent financial support package must reach our pubs and breweries quickly to save them from permanent closure and help hard-working licensees through this incredibly difficult time.”