From her spot behind the wood-panelled bar of The Rose pub in Norwich, landlady Dawn Hopkins has begun to dread the coming months. Springtime with its warmer weather and longer days usually makes people more willing to head out for a pint, while the football season finale has fans from nearby Carrow Road staying for another drink.
But instead of ordering more stock and sourcing extra staff, Dawn is weighing up when the best time might be to cut opening hours.
She, like many landlords across the country, felt cautiously optimistic when Keir Starmer swept to power in the summer. There was the sense that the previous Government hadn’t listened to the industry and the Labour Party, who had a historic reputation for boosting hospitality, could come to their aid.
But the moment Rachel Reeves opened her mouth and delivered the autumn Budget, all that positivity evaporated. Despite being billed as a “Budget for growth”, it slashed business rate discounts and boosted the minimum wage and national insurance contributions.
Now, many small businesses face difficult decisions ahead of the changes coming into effect in April. Instead of renewal, Dawn has associated this spring with “impending doom”.
Adding to her woes is the recent 3.6% rise in alcohol tax on wine and whisky coming into effect in line with the Retail Prices Index measure of inflation.
Publicans the Express have spoken to estimate these measures could force them to charge £2 to £3 more for each bottle of wine.
Dawn says the Chancellor’s plans have left her feeling “totally deflated. She says: “I just can’t understand how they can expect businesses, not just pubs, to take on the extra costs that they’re talking about. How are we going to cope without having to pass on these massive rises to customers, which is, I’ll say, is nothing that we ever want to do.”
A lot has changed in the industry since Dawn quit her job in the IT department of a London commodities trading firm to become a full-time pub landlady. From battling supermarket loss-leader pricing to adapting to the post-lockdown craze of ordering craft beer selection boxes online, pubs have long had to fight for survival.
Dawn Hopkins landlady of the Rose has had to diversify what she sells at her pub (Image: Dawn Hopkins )
But believing pubs in Britain will find a way to persist regardless of what is thrown their way is complacent and even dangerous, according to Alastair Kerr, South West Regional Representative for Campaign for Pubs.
“Pubs are ingrained in British culture, and I think that’s an issue because everyone assumes they’ll be there forever,” he explains. “But if you don’t use them, they’re gone. I mean, a pub isn’t just for Christmas, it’s for life. Part of the problem is that people want to support their pub but don’t have the means to do so.”
Alastair says the cost-of-living crisis has already seriously affected venues like the “very traditional kind of back street boozer” in Gloucester city centre he was previously involved in running.
It has switched from being open five days a week to three and this was before Reeves’ Budget cost spikes. “It’s going to be a disaster,” he adds, “this is the most anti-growth Budget ever with National Insurance contributions and national minimum wage going up small businesses are bearing the brunt, especially pubs.”
He feels that whenever there are difficult economic conditions, drinking establishments receive the least protection and fears that the legendary resilience to those headwinds is beginning to crack.
“Pubs always take the brunt of things and seem to survive. [But] in England and Wales there are less than 39,000 pubs in the country now. Even at the height of Covid, you still had over 45,000,” he adds.
“[During the pandemic] we were subject to some of the toughest trading restrictions and we haven’t bounced back. [But] we’re getting punished again just for simply existing.
“The hospitality sector employs upwards of 3.5 million people in bars and pubs, so it just feels demoralising. [Given all of that] I’m not surprised that some publicans across the country and across the South-West are probably saying, well, is there any point in doing this anymore?”
Lee Worsley is one pub owner who has already planned to operate with fewer staff members than previously planned because of the Budget. The owner of two food-led pubs with accommodation in villages around West Dorset was planning to hire for three roles, but, as a result of Reeves’ NI and minimum wage hikes, he won’t be bringing in anyone else.
“We’re in a seasonal area so there’s always a risk with taking on salaried full-time positions,” he says, “but we’ve always committed to that in the past and we’ve reached a natural point where we were some staff at left and we were going to be recruiting. But [after the Budget] we’ve totally changed the recruitment policy.”
Although the cost of a pint of beer seems to have skyrocketed, Lee believes that the fundamental problem is that people’s disposable income has shrunk.
“If you go back to when beer became £1 a pint, the average wage around that time [in 1989] was about £1 an hour. You look at it now and the wage is £11.50 and a pint, depending on where you are in the country, is £5 to £6.
“So as a proportion of your income it’s considerably less. It’s just there’s lots of other drains on income such as mortgages and cost of renting. There isn’t so much disposable income and therefore things are expensive.”
Lee also felt let down by Reeves, who he thinks has failed to appreciate the razor-thin margins in hospitality, where even single-digit percentage cost increases have an impact.
The sector has felt the force of utility price rises in the past few years and has seen the war in Ukraine make essential products like Co2, which puts the fizz in a pint, massively expensive.
He, like many of the landlords the Express spoke to, perceived Reeves as spending too much time seeking favour with off-shore private equity firms in City of London skyscrapers. Her “spreadsheet thinking” ignores the reality small businesses face and communities her cost spikes hit.
Pub licensee Paul Crossman who runs three pubs in York speaks to the Daily Express about his his con (Image: Andy Commins / Daily Mirror)
Labour supporter Paul Crossman, who owns three drink-led pubs in suburban York, not far from Reeves’ constituency of Leeds West, believes the Chancellor’s measures will only strengthen the hand of the foreign-owned or offshore companies that he says control the majority of the British pub market.
Although boozers are no longer owned by a handful of massive breweries, as was the case in the 1980s, Crossman argues that the replacement ‘Pub Co’ model, which sees smaller independent franchisees manage establishments often for chains, still tie pubs into relationships with multinational giants like Heineken or Carlsberg that benefit the big firms.
“Rachel Reeves doesn’t need to be helping those people,” he tells the Express, “the measures that came in through the budget [showed a] real lack of sensitivity [and] humanity.
“These are mostly family businesses that employ local people from their local community and it’s those people that will be losing their jobs.
“Small businesses will be feeling the pain of this and it will run through their supply chains. It’s such a beautiful industry, but it’s really misunderstood by the Government. It has to be approached on the level of small business.”
He adds: “[Rachel Reeves] gives the impression of her taking a big macro view of things.
[But] the pub industry is full of loads and loads of micro situations.
“Even with the big Pub Co companies, the people operating their pubs are small business people who are doing it on a lease. But everything is stacked in the favour of the big owning company and these are the people she seems to be courting.”
One of those working outside that status quo is micro-brewer, Philip Saltonstall and his biggest fear is that following the Chancellor’s changes, pubs will fall even more under the control of the industry’s big players.
He’s already seen how the boozers he supplies think only in the short term; they don’t want to order large quantities and often only want single-barrel deliveries.
“Historically, we would say to a publican, ‘We’re driving our van to yours, so we can’t come with one cask,” he says. “But if you take six, then we’ll give you a big discount because we’re saving road miles and all the rest of it.’
“That’s gone now because they can’t plan on volumes of that size because they can’t know from one week to the next [what they’ll sell].
“All our publicans are saying ‘some nights are busy and they’re still functioning’ and then other days for reasons they can’t understand or plan for, they’ll be dead and empty.”
Beyond the Budget, Saltonstall sees pubs and beer producers’ biggest challenge as the changing habits of British people.
Pints are simply not being sunk in the volume they once were and even the venues for doing so are shifting from traditional boozers to high-street micro pubs or brewery tap rooms that serve only independent beers at a considerably higher cost.
“When the Campaign for Real Ale came into existence in 1971, 80% of what was being drunk in the UK was cask beer, and now it’s 8%. I think a lot of that has departed,” he adds.
“There were moments in the past when pubs were all small, cutesy little cosy little nooks, largely that you went in to see your friends and they would be warm, which would be a massive improvement normally on most people’s houses.
“[But] the format of pubs is changing, I get the impression that publicans will find their way around that tide.”
For decades they have managed to do just that but, from April, the battle to survive will be a whole lot harder.