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  1. Spotlight on Policy
20 July 2020updated 22 Sep 2020 1:17pm

Can pubs survive the coronavirus crisis?

Covid-19 has paralysed the food and drink sector, but reopening alone won’t be enough to get businesses back to their best.

By Rohan Banerjee

Pubs have become something of a political football over the course of the coronavirus pandemic. When they were allowed to reopen on 4 July, after nearly four months in lockdown, some people rushed to get a round in. Others pointed out that gathering crowds in public houses still poses a very serious risk of spreading Covid-19. While many of the UK’s pubs have reopened, a handful have already had to close again because of recording either staff or customer cases of the virus.

But whichever side of that bar you sit on, pubs are a cornerstone of British culture, and also a huge player in the UK economy. According to the British Beer and Pub Association (BBPA), they employ around 600,000 people across the UK, with almost half under the age of 25.

The clamour to reopen them is clearly about more than the yearning for a pint of draught over cans out of the fridge. But in that rush to get businesses going, questions remain about how to do so responsibly. When pubs reopened two weeks ago, scenes of crowds pouring out onto the streets in central London didn’t evidence much social distancing. John Apter, national chairman of the Police Federation of England and Wales, tweeted that it was “crystal clear” that, after a few drinks, people “can’t or won’t” keep two metres apart.

With business models that thrive on footfall, though, Tom Ledsham, whose family runs The New Inn in Clapham, north Yorkshire, says that any post-pandemic regulations need to be “realistic” – which is not true of some of the government’s suggestions, such as keeping music volumes low because customers shouting near each other could increase the risk of transmission. “How do you police that?” Likewise, social distancing, Ledsham explains, “represents a bit of a logistical nightmare, to be honest, especially as there is no consistency in the size of venues.”

Ledsham “would welcome” fresh impetus to improve hygiene standards in the post-pandemic pub scene, but he believes this can be achieved without putting limits on people’s presence. “If Covid-19 means that pubs get cleaner,” he says, “then that’s a happy side effect. I’m sure most landlords would understand the need to get even stricter about hygiene, and they’d probably embrace it, because they want to keep their customers safe.” Many pubs, since reopening, have installed panes of plastic or glass between those behind the bar and those in front of it. But those measures, Ledsham notes, depend on “whether you can afford to do it.”

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And one publican, who prefers not to be named, tells me that any measures against Covid-19, “while important”, should aim not to “detract” from the experience pub-goers have come to expect. “The problem with glass panes is that you don’t want the pub to start feeling like a bank or a post office.”

The publican’s venue in Nine Elms, south London, has had a “pretty steady” rate of return to business so far, he says. “The perspective from the coalface has been that people have been ready to come back to the pub, and not been as fearful as some media reports may have suggested. People are glad to be back in the pub.” On the scenes in Soho, he notes that the “overspill” would have happened on “any busy night out in London before the pandemic”, and at some point there’s got to be some “appreciation of personal responsibility [on the part of punters] in terms of the safety risks they take. Landlords can’t monitor that.”

To what extent pubs can implement measures against Covid-19 will come down to cost, too. “Big chains might be able to do a lot more,” he says. “Every single pub is different and will have their own take, and their own limitations…The thing is, there were lots of challenges [facing pubs] that were independent of the pandemic.”

While the government’s unprecedented Job Retention Scheme – which allows businesses to place employees on paid leave and claim a cash grant from the state to cover up to 80 per cent of their wages – helped many pubs to stay afloat during lockdown, it did not offset the numerous operational costs unique to pubs that have remained unchanged.

Ashley McCarthy, the landlord of Ye Olde Sun Inn in Colton, north Yorkshire, is grateful for having been able to furlough his staff. But he accepts that the scheme – which has been extended once already – cannot “go on forever”. McCarthy points out that “we can’t afford to bring people back [from leave] until our business is up and running again. That’s a cold, hard fact.”

It could take a while, he says, for trade, let alone profit, to return to pre-lockdown levels, so simply “turning off the tap [of furlough funds]” could cause further problems. Ledsham adds that without “changes to other stuff”, such as rent and taxes, many pubs coming out of lockdown will still struggle to cope with “the same overheads” that they had before. “Say you limit the pub to only 20 customers at a time, you’ve still got to think about the business rates, the beer duty and all your other running costs. Unless those are changing, you’re asking pubs to cover those same costs with fewer punters coming through the door. It’d be impossible to do that without raising prices on your products.”

According to the BBPA, around one in every three pounds spent in pubs goes to the taxman, with the average UK pub’s tax bill coming to £140,000 annually. Among the main contributions to this figure are beer duty, leasehold rents and VAT. Beer duty in the UK, which is 54p per pint with a 5 per cent or more alcohol by volume rating, is 11 times higher than in Spain and Germany, and three times higher, on average, than in other European Union countries. “Well, there you go,” says Are Kolltveit, landlord of The Chandos Arms near London’s Edgware Road. “I don’t think we [publicans] could realistically ask for the government to just throw money at us… it’d be really hard to decide who was most in need. But even a break [from certain taxes] or a reduced rate [of beer duty] for a short period of time would help businesses to get back on their feet quicker.”

The UK’s decision to leave the EU, Kolltveit stresses, is still an issue, even if the narrative around it has taken a “bit of a backseat” to Covid-19. “Brexit is still nonsense, if you ask me.” Kolltveit, who currently employs 10 members of staff, “who are all EU nationals”, and who were all placed on furlough, wants “clarity” on immigration policy post-Brexit sooner rather than later.

Reopening pubs, ultimately, is just the first step in the sector’s recovery. The challenges that existed before anyone had heard of Covid-19 still exist now. Indeed, as Kolltveit puts it: “These things don’t just stop because of the pandemic.” 

This article is from our recent Spotlight report on business continuity. Click here to see the full supplement.

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