In a broadside against UK politicians, brewing industry veteran Dougal Sharp has accused successive governments of using pubs as ‘a convenient cash machine’ for extracting taxation, driving the sector towards extinction.
The Innis & Gunn founder and master brewer, who started his career at Caledonian Brewery 40 years ago, said that the current economic environment facing pubs was the worst he’d ever seen.
But Sharp forcefully rejected airy explanations blaming ‘market forces’ and societal change for reducing pub-going, and instead pinned the blame squarely on the impact of fiscal decisions made by politicians.
“In my four decades in brewing and pubs, I’ve never known it to be tougher,” said Sharp. “Hundreds of pubs are being forced to close every year across the UK, taking thousands of jobs with them.
“One of the biggest drivers of this decline is cost. The cost of going out has become absurd and a lot of that is to do with the costs being imposed on hospitality businesses.
“Soon enough, the £10 pint will be a fixture of pubs across the country,” he warned.
“Hospitality in the UK pays full 20% VAT, while many comparable countries back their hospitality industries with a far lower rate on food. Duties on alcohol are among the highest in the world. Then, there’s business rates, which have become a game of political bingo,” he noted.
“On top of that, our energy prices are the most expensive in the developed world and some of the regulation brought in for pubs in recent years has been well-intentioned, but a lot is pure bureaucratic theatre.
“Of course we want to pay staff fairly, but the rising minimum wage combined with employer National Insurance contributions adds up at a time when many businesses are already stretched,” said Sharp.
“All these things together turn into reduced hours, fewer staff, less training, less investment, and another ‘To Let’ sign.”
Sharp acknowledged recent UK and Scottish government concessions on non-domestic rates, but said that the proposed 15% relief was ‘too little and, for many pubs, too late’. What was actually needed was a complete overhaul of all the taxation currently being extracted from the licensed trade.
“Here’s the challenge to Westminster and the devolved governments – cut on-trade duty by 50%. Cut VAT for hospitality to 8%. Cut energy costs 30% by removing net zero charges. And reduce business rates by making the amount payable an affordable percentage of actual turnover.
“The outcome we’re aiming for is simple, normal, and frankly not revolutionary – getting pints below £4, making pub food affordable, and making pubs full, thriving places again.”
Sharp concluded: “Save the pub, and you save something bigger than a pint. Kill it, and don’t be surprised when the country feels colder, lonelier, and ultimately loses an important part of its identity.
“Pubs shouldn’t be treated like a convenient cash machine, but like what they are: a national institution.”
Innis & Gunn currently operates three taprooms in Edinburgh and Glasgow, which employ more than 100 people.
