Business development · 20 November 2015

Four pubs are closing every day with National Living Wage pressure taking its toll

JD Wetherspoon boss Tim Martin has warned the National Living Wage will hit Britain’s high streets hard
JD Wetherspoon boss Tim Martin has warned the National Living Wage will hit Britain’s high streets hard

Pubs are closing at their highest rate since 1904 when ten per cent of pubs were forced to shut by law, according to the Lost Pubs Project.

Four pubs are closing everyday in the UK, with the majority converted for residential or commercial use. While there are around 48,000 still running in England today, the Lost Pubs Project, a self-proclaimed community project to archive the pubs before they are forgotten, has identified more than 29,000 closed pubs.

The Campaign for Real Ale has found a similarly bleak outlook, with its findings indicating around 29 premises a week were no longer operating as pubs.

Earlier this year, the government removed certain permitted development rights for listed pubs facing closure.

Permitted development rights allow certain classes of development to proceed without needing express planning application. Pubs can apply to be listed as an asset of community value, meaning planning permission would be required for any change of use, or development on the place.

A landlord in Hampstead wasn’t happy though, when local campaigners managed to get his pub, the Duke of Hamilton, listed as an asset of community value. Declaring them “hypocrites in cardigans”, Steve Coxshall announced he was banning the 800 individuals in question, as they didn’t fully support his business and only ever drank half pints.

Coxshall complained that he shouldn’t have to wait the required six months (for the community to try and raise enough money to buy the pub off him) if he decided to sell the pub, as if his business ran into trouble, he’d need to sell fast to pay the bill.

“I bought the pub to save it. But if you’ve got a pub and there is an economic downturn, what is the point of an ACV if there is no business? If you have a six-month window where you can’t sell it, who is going to pay the bills?”

He criticised the campaigners in question, saying “they haven’t put money into the pub – they are just a bunch of hypocrites in cardigans”.

Beer sales though, were boosted by the Rugby World Cup
Beer sales though, were boosted by the Rugby World Cup

Tom Stainer, head of communications at CAMRA, said: “It’s becoming increasingly apparently that pubs are seen as soft targets for property developers, keen to use loopholes in planning law which allow them to acquire and change the use of a pub, or demolish it completely, with no reference to the communities the pubs serve, or local planning authorities.”

He urged local communities to get their local pubs listed as assets of community value – saying it “increases the protection for pubs”.

The change in living wage has also been a point of contention for many pubs feeling the pinch. Even big names have struggled. JD Wetherspoon recently put 34 of its pubs with an estimated value of £40m up for sale.

Chairman Tim Martin had warned that the National Living Wage could cause pubs to close and contribute to the decline of struggling high streets.

“It is certain that high streets in less affluent areas, which already suffer from serious problems of empty shops and dereliction, will suffer further if pubs and other labour-intensive businesses close,” he said, adding that the government had made decisions on a “political whim”.

Beer sales though, are on the up, according to the British Beer & Pub Association, rising 3.9 per cent in the third quarter compared to 2014. The Rugby World Cup and off-trade sales were credited with boosting trade.

The annual trend in sales was fairly stable, dipping 0.4 per cent under the previous 12 months.

Image: Shutterstock

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ABOUT THE EXPERT

Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.

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