Today in the Chamber, Munira urged the Chancellor of the Exchequer, Rishi Sunak MP, to provide extra support for pubs so they survive the winter period.
Following the national lockdown throughout November and a new tier system coming into effect this month, pubs will lose out on the revenue they would have had during the festive season.
With current grants merely offering a one-off payment of £1,000, Munira asked the Chancellor what further measures he planned to take to support the hospitality sector, given the newly-announced restrictions.
Speaking in the Chamber, Munira said:
“Thank you Mr. Speaker. I’m hearing concerns for many pubs in my constituency, such as The Barmy Arms in Twickenham and the White Hart in Whitton, about how on Earth they’re going to make it through this winter. Given London is to be placed into tier 2 with some of its very perverse rules for pubs, will the Chancellor look urgently at further extending VAT relief, business rates relief, and further grants for the sector please?”
The Chancellor replied:
“Well, Mr. Speaker, I know all about the difficulties the hospitality sector is experiencing at the moment. The Honourable Lady will know that the various measures she spoke about, both business rates holiday and VAT cuts last all the way through to next spring. So they will provide support during the winter and we have in place a grants programme that provides a grant to businesses in the hospitality sector, whether they are open in tier 2 or indeed closed, with further support provided to Local Authorities for discretionary support as they see fit.”
Following the exchange, Munira said:
“I am disappointed that the Chancellor has failed to recognise that the stakes have been raised for the hospitality sector. 10,000 pubs and thousands of jobs are at risk if the Government fail to provide further support.
Not only are these businesses crucial for those who own and work in them, they are also vital for communities who have struggled through this year. It is imperative that pubs survive the winter.”
Munira co-signed a letter on the subject written by her colleague, Daisy Cooper MP.
The letter reads:
Dear Secretary of State,
Save Pubs and Hospitality Before It Is Too Late
The hospitality industry is facing an existential crisis like no other sector. As restrictions are eased for retail and the travel industries, pubs and restaurants have been singled out for more draconian measures in the fight against Covid. Without further support, the Campaign for Real Ale and others estimate we could lose around 10,000 pubs this winter. Pubs rely on
the festive period to generate the income that then sees them through the lean first quarter of the year – without that, many will now find themselves in dire straits. Without action from Government now, we stand to write off businesses, jobs and a huge part of our cultural heritage.
We are already hearing devastating reports of publicans and their staff in states of genuine distress. These small business owners stand not to lose just their only source of income, but in many cases also their family homes. They rely on this season to see them through the lean months from January to Easter, and have already invested considerable sums of money in Covid measures, extra staffing and of course stock that has been wasted. They desperately need your help.
We cautiously welcome the partial U-turn on the 10pm “pubs curfew”. The further hour allowed to finish meals and drinks partly resolves the public health hazard of crowds of people being thrown onto the streets, public transport and into takeaways and off-licences at exactly the same time. This also allows struggling restaurants to again offer the second dinner sitting they rely on to break even. But for pubs and bars, particularly those whose
trade before the pandemic relied upon the late night economy, it is of little consolation. The damage to these businesses will in most cases be irreversible, and we stand to lose a great deal of the diversity in the sector. We still call on the Government to release the scientific evidence behind this curfew.
New Tier Restrictions
Notwithstanding, the announcement of the new tiers by the Health Secretary means there is now a much greater crisis facing the sector. Without further support, the new Tier 2 and 3 restrictions, which will apply to the vast majority of the country, could obliterate thousands of jobs, livelihoods and businesses. Pubs specifically will really struggle. Pubs went into 2020 showing a healthy 5% growth overall, despite battling the adverse headwinds of crippling business rates, inequitable application of beer duties towards the on-trade and a VAT system that penalises responsible drinking in pubs rather than buying in bulk from the supermarkets. According to Hospitality UK, they are now showing a 45% decline for the year. In an industry with staggeringly low margins, the crisis speaks for itself.
Tier 3 – Takeaway Only
This tier effectively makes it impossible for pubs to trade at all, let alone profitably . These pubs are effectively closed and need a package of support far in excess of the sums currently offered. The industry average for grants received due to closure is £1,334 per month. This will not even cover rents for most tenanted businesses, let alone the rest of their fixed costs or the lost income of the most profitable month of the year. By expecting these struggling pubs to also contribute the National Insurance and pension contributions to the furlough scheme, we are sounding their death knell and sacrificing hundreds of thousands of jobs across the country.
Tier 2 – Substantial Meals
This tier, affecting most of the country, expects pubs to operate as restaurants. This is not the business model that they have been able to rely upon, in some cases literally for centuries. Even for pubs that do serve food, the decreased capacities, and added labour and equipment costs make this unviable for many. In addition, the British Beer and Pub Association estimates that two thirds of wet-led pubs will just have no way to trade at all. These pubs need an urgent package of support to see them through this pandemic. They were successful, popular businesses and vital hubs for our communities before Covid. With Government support they can be again.
We recognise the need for responsible drinking, and the risk that customers under the influence are less likely to observe social distancing measures. However, the requirement for a substantial meal massively increases the cost to those who would otherwise simply have a pint, or even a soft drink, in their local community pub. It excludes those on a lower income, who cannot afford to buy a meal in order to visit their local, as well as those who go to the pub on their own simply for the atmosphere and to be in the same place as other people, even if they are not socialising with them. This is especially the case for older men living on their own, who are otherwise especially vulnerable to isolation and loneliness. Perversely, it also means that those who may have simply wanted a quick pint outdoors with their friends are now being coerced into staying longer as they must have a meal at the same time. A swift 20 minute pint will become at least an hours visit.
We urge you to remove this absurd requirement for sales in outdoor areas, where there is plenty of ventilation. We also urge you to work with the industry to to review this requirement for those who sit inside a pub on their own, to have a pint and a read of the newspaper for instance. This could be the only opportunity many people have to leave the house and have any meaningful contact with the outside world this winter.
With the majority of Covid transmission appearing to be within a household setting, it is astonishing that hospitality venues – with all their investment in Covid secure measures and social distancing – are excluded from the Christmas easing of restrictions. Surely it is more responsible to have family gatherings in a well ventilated, sanitised and controlled environment, than in homes. We have all experienced a dozen people being squeezed around a relatives dinner table in the festive season. Why on earth wouldn’t we take advantage of what the hospitality sector is built for – eating out in space, comfort and safety? It is time to urgently review this both for the benefit of our pubs and restaurants – but critically for wider public health.
Brewers and Suppliers
The cask beer brewing industry in particular has been decimated by the Covid restrictions. They have had no industry specific help, no blanket business rates exemptions, and they are on the verge of shutting up shop. They can’t sell to the off-trade suppliers, and cask has a short shelf life. It is one of the product lines that is first to be slimmed down during quieter
periods in hospitality. The UK has come on leaps and bounds in this area over the last two decades, with local breweries producing quality beers and employing their local communities – all across the nation. Are we now to stand back and let them disappear, and the livelihoods of so many with them? We urge you to get a package of real support to these breweries, and SMEs across the country that supply pubs and restaurants and who are on their knees.
Package of support and reviewing restrictions
To survive, pubs and hospitality still need urgent support to let them plan for their eventual recovery. We urge you to: Widen the 5% VAT rate, now extended until March 2021, to include all hospitality sales, including beer and alcoholic drinks; Act now to extend the business rates exemption for these businesses beyond April 2021 so businesses can look ahead with certainty; Increase closure and restrictions grants to cover business fixed costs, staff furlough expenses, and compensation for lost revenue; Cut the rate of beer duty for draught beer to rescue pubs and cask brewers.
As stated above, we also urge you to remove the absurd requirement for alcohol sales to be accompanied by a substantial meal in outdoor areas, where there is plenty of ventilation, and consult with the industry on other effective measures that could be introduced to keep us safe from Covid. The industry have many proposals that would achieve this without destroying businesses and livelihoods. As above, we also continue our call on the Government to release the scientific evidence behind the 10pm curfew.
We look forward to hearing what you will do to stop the decimation of our pubs and hospitality sectors before it’s too late.
Daisy Cooper MP St Albans
Ed Davey MP Kingston and Surbiton
Munira Wilson MP Twickenham
Sarah Olney MP Richmond Park
Tim Farron MP Westmorland and Lonsdale
Wendy Chamberlain MP North East Fife
Wera Hobhouse MP Bath
Christine Jardine MP Edinburgh West
Jamie Stone MP Caithness, Sutherland and Easter Ross
Layla Moran MP Oxford West and Abingdon
Alistair Carmichael MP Orkney and Shetland