Rural Pubs: Fiscal Support

[Wera Hobhouse in the Chair]

I beg to move,

That this House has considered the matter of fiscal support for rural pubs.

It is a pleasure to lead this debate on fiscal support for our country’s great rural pubs. Although this debate is about fiscal support, it is really about our heritage. To demonstrate that, I would like to take hon. Members on a pub crawl around my constituency. Meriden and Solihull East has the historical, grade II-listed Malt Shovel in Barston, which dates back to the late 15th or early 16th century and is widely regarded as one of the oldest pubs in the borough of Solihull. There is also the Queen’s Head in Meriden, a 17th-century coaching inn. We would then move on to Hampton in Arden, where there is the White Lion, another 17th-century pub with traditional architecture. I should say at this stage that I do not drink, so I am happy to drive Members if they come.

From Hampton in Arden, we would travel to Catherine-de-Barnes, where the excellent Boat has a tremendous beer garden for sunny afternoons. In Dorridge, the Railway Inn, right next to the station, often serves hard-working commuters after a long day’s work. Dorridge also has the Forest, a 19th-century coach house just by the train station, serving tremendous food and drink, with great rooms for weary guests. There is also the Drum and Monkey, my local, which is a famous country pub with a history dating back to the 1860s.

After all that, we would end up in the historical village of Knowle, where I want everyone with me. In the village, there are a number of pubs that we could choose from, but I have selected a couple. The Wilson Arms, now a Toby Carvery, is a 16th-century pub with timber frames and excellent Sunday lunches. The Red Lion, right on the high street, has great food and drinks.

I pick Knowle to end, because this weekend we are celebrating the 750th anniversary of the village. I pay tribute to all those who make the village the special place that it is: Visit Knowle, the Knowle Society, the various publicans and, of course, our residents. To them, I say thank you. Community, character and identity, that is what our rural pubs represent. That is why they are worth fighting for, and why I am here today, concerned about the impact of the Government’s policies on our rural pubs.

I will start by talking about the economic importance of pubs and their contribution to the economy, especially in rural areas. There is no doubt that the UK’s pub and brewing sector plays an enormous role in rural constituencies across the UK. Rural pubs provide jobs and huge economic value. According to the British Beer and Pub Association, the pub and brewing sector supports more than 300,000 jobs in rural constituencies in the UK. Combined, rural pubs and breweries contribute almost £11 billion to the economy and generate £7 billion in tax.

In addition, as I have outlined, rural pubs are steeped in history and heritage. They attract tourism from across the country and the world. Tourism is estimated to be responsible for about a third of employment in rural pubs. People come from all over the world to spend time in the great British countryside and enjoy the excellent food and drink that we put out in our great pubs. In all our constituencies, but particularly for Members from rural seats, the influence of pubs in our constituencies is enormous. I am immensely proud of the pubs in Meriden and Solihull East. We have almost 40 local pubs, which support 1,740 jobs. Of that cohort, there are 500 16 to 24-year-olds working in the sector, which makes an overall contribution of £61 million to the local economy. In the wider west midlands, there are more than 4,000 rural pubs, which employ 88,000 people and contribute £2.9 billion to the economy.

Aside from the huge economic impact of these pubs, they are also a vital part of the fabric of our rural communities. They provide food, drink and places to stay, and some historical pubs date back centuries, truly making them part of our great and unique British history.

I congratulate the hon. Gentleman on securing this debate. As everybody knows, I represent the most beautiful constituency in the United Kingdom. As he says, pubs are not just about food and drink; they are also somewhere for people to go to socialise. They are great for people who are lonely. The Butchers Arms in Carhampton reopened in January, and it now has a library and a shop. I am sure he would agree that is a very good situation to be in.

Bhatti: I thank the hon. Member for her intervention, but I think we should have a rule in this House that when a Member says they have the best constituency, they owe everyone a pint. [Hon. Members: “Hear, hear!”] I could get used to this popularity. The hon. Member is absolutely correct, and I will come to the social value of pubs as a meeting place.

When people think of Britain, they of course think of our iconic landmarks such as Buckingham Palace or Big Ben, but they also think of our red post boxes, our black cabs and our rural pubs. Our truly unique rural pubs are the pillars of our local communities, serving as meeting points for old friends, destinations for wedding receptions and hubs for our community.

Does my hon. Friend recognise that, for many rural locations, the rural pub is the last-standing business in the village? It is the post office, the village store, the job club, the parent and child club and the club for the elderly and lonely. I have even seen, through Pub is the Hub, a barber in the lounge of a pub. It cuts people’s hair during the day and serves them drinks in the evening. Does my hon. Friend agree that when the Government impose extra fiscal pressures on pubs, what they lose is probably worth far, far more than the revenue they think they are gaining?

I could not agree more. That is exactly why we are here today. I am really concerned about the core of our communities being hollowed out by Government interventions. For elderly people in particular, a good pub lunch with great drinks and warm food can be a staple of the weekly routine. It is therefore no wonder that two thirds of adults believe that their local pub is vital to combating loneliness and social isolation. On the back of my hon. Friend’s intervention, I gently ask the Minister whether he recognises that losing a rural pub has a huge impact on our rural communities. Where are those people meant to go?

Dr Thomas Thurnell-Read from Loughborough University has conducted some fascinating research into the social value of pubs in local communities. The project looked at the impact of pub closures on communities and made it very clear that the loss of a pub, as my hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood) said, is so much more than just the loss of a business. Dr Thurnell-Read made it clear that the closure of a pub echoes throughout the entire community, impacting friendships, identities and vital local support networks in ways that cannot be captured by data alone.

As traditional community infrastructure such as banks, village halls and post offices also come under pressure, pubs are more important than ever as anchors in our rural communities. For rural areas, some pubs now act as more than just a place to meet and socialise. They have essential services such as micro post offices, prescription drop-offs, wi-fi hubs and barbers, as my hon. Friend mentioned. They even house part-time library shelves.

Research by the Rural Services Network has found that for every £1 invested in the provision of services and activities in the pub, an average of £8.28 of social value is created. It found that the diverse new services offered by pubs in local communities have lasting positive impacts on the overall wellbeing of individuals and their families, as well as on reducing loneliness, improving mental health and giving people greater independence.

The concerns about taxes that the hon. Member is raising have really affected Jack, the owner of the Ye Olde Poppe Inn in Tatworth, and Buddy, the owner of the Flying Fish. Does the hon. Member agree that we need to lower VAT for pubs?

The hon. Member makes an interesting point. When publicans speak to me about taxes, they talk about their turnover either increasing or staying stable but the costs going up. The Government have to set out what they will do to improve the fiscal landscape for pubs, and for the hospitality industry more broadly.

A lot has been made of Lord Milburn’s report on NEETs—those not in education, employment or training—and the rise in the number of 16 to 24-year-olds in that category. Has the Minister considered the impact of these tax rises on pub-specific jobs? Some 51% of people working in pubs are under the age of 24, meaning that many are likely to be balancing working in the pub with other part-time commitments such as school or university. These new employment costs mean that publicans will think again about hiring staff on a part-time basis, driving many people into worklessness. The national insurance rise has had the single most damaging effect on the Saturday job.

In addition to the crippling jobs tax, pubs are also suffering because of stifling increases in business rates. These policies threaten to be a huge—maybe even the final—nail in the coffin of many pubs that are really struggling. Analysis from UKHospitality has found that, by 2027-28, the average pub’s business rates will be £4,500 higher than they are today, rising to an astonishing £12,900 within three years, even with the reduced multiplier and transitional relief. I asked one of my staff members how much they paid for a pint of beer in one of the pubs in my constituency, and they said a pint of lager came to £7.50. That pub would have to sell an extra 1,720 pints just to offset the cost of those shocking tax increases.

The Conservatives recognise the value of our pubs. We have pledged to scrap business rates for 250,000 retail, hospitality and leisure businesses because we recognise the importance of ensuring that businesses keep more of what they earn, allowing them to invest in the community rather than sending it back to central Government. I say to the Minister that Governments do not create growth or jobs; our businesses do. This announcement formed part of our larger campaign to get Britain working again, freeing up money for businesses to hire new people, often younger and always local. It would drive new jobs and economic growth across rural areas of the UK.

It is important to note that the article in The Telegraph on the changes for rural pubs was about the fact that we published, with full transparency, the guidance used to value pubs that was signed off under the previous Government. This Government are cutting pubs’ business rates by 15% this year, freezing them for the next two years and reviewing that very guidance. We respect the press, but that article was fake news, and I do not think it should be repeated in this place.

I love the Minister’s passion, but I have not finished yet, and I encourage him—[Interruption.]

Order. Can I make sure that we all understand that lots of Members want to speak? If you start debating with the Minister now, we will lose time. Please respect that, and I encourage you to come to the end of your speech.

I will speed up, Mrs Hobhouse, but I encourage the Minister to wait until I have finished. The litany of regulation, such as in the Employment Rights Act 2025, and the taxes that the Government have raised have had a huge impact. Labour is waging war on our rural pubs. Those publicans can feel it, and we can all see it.

I know that we are all looking forward to England’s first world cup game against Croatia this evening, and along with all Members, I wish them the very best. We have some of the highest alcohol duties on a pint of beer. I do not want to broach the subject of the EU but, while I am not a natural fan of closer alignment, it seems that Europe is in a better place on this, so I ask the Minister to comment on that.

In conclusion, Madam Deputy Speaker—[Interruption.] Sorry, Mrs Hobhouse; hopefully you will be Madam Deputy Speaker one day. In conclusion, I say to the Minister that the litany of measures taken by the Government have affected Saturday jobs and had a huge impact on young people. He has shown a lot of passion, but I encourage him to show bravery—and perhaps England fans will chant his name tonight.

I encourage everybody who wants to speak to bob. I intend to call the Front Benchers at about 3.28 pm, which gives everybody else an informal time limit of four minutes. If Members do not stick to that, I will have to put on a formal, and shorter, limit, so please respect each other. I thank Saqib Bhatti for sticking very nicely to his time limit.

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I congratulate the hon. Member for Meriden and Solihull East (Saqib Bhatti) on securing the debate. As someone who used to represent the industry, I understand the challenges that our pubs have faced not just over the past two years, but over a decade of changing attitudes and behaviours that mean many of us do not go to the pub as often as we used to. I am sure that, were it not for our service in this place, many of us would be enjoying a pint or two while watching England this evening, benefiting from the extra licensing hours that the Government have allowed to celebrate the world cup.

I will not be as cynical as others—or maybe I will be—by mentioning a variety of pubs in my constituency that residents should visit tonight. Whatever happens tonight, and whether they go to the Golden Cross or the Coach and Horses in Harvington, or the Old Bull or the Bulls Head in Inkberrow, I hope that they spend their money in the local pubs in our villages. In Inkberrow, Feckenham and Hanbury, the local is often the last community asset standing. It is the place where people gather, older residents find connection and the social fabric of our villages is woven. In my constituency, many of them have become temporary post offices.

I thank the Minister for his engagement during the business rates process. I was one of the Labour Members who darkened his door with concerns and recommendations for change. It is not lost on me that those changes represented £400 million extra for pubs. I thank him for his honest engagement throughout the process, which all Back Benchers should welcome. I also welcome the 15% business rates discount and the frozen multiplier, which are worth nearly £1,650 for the average pub. However, the sector warns that deeper structural reliefs are needed, and that, without further change, 15,000 jobs could be lost over the next couple of years. That is the reality I hear from licensees across my constituency.

It is a pleasure to speak with you in the Chair, Mrs Hobhouse. I congratulate the hon. Member for Meriden and Solihull East (Saqib Bhatti) on securing this important debate.

I will begin by mentioning two people I represent. Becky runs the Red Lion in Eynsham. She met the Under-Secretary of State for Business and Trade, the hon. Member for Halifax (Kate Dearden), at my invitation earlier this year. That followed a question in the House, so some Members present, including the Minister, who is smiling, may already know Becky’s story. Her turnover is up, but her profits have vanished. She said that there is

“no living to be made any more”

from her rural pub. Think about what that means: the customers are still spending, yet she is squeezed to the point of asking herself whether to carry on at all.

Donna runs the Oxfordshire Yeoman in Freeland. She has faced the uncontrollable in the last few months: a washout summer, when summer trade is the very thing that a rural pub banks on to survive the winter. Stacked on top of that, she has faced the entirely controllable: a 50p minimum wage rise, soaring energy bills and rising water bills, all landing at once.

When landlords are counting every penny and customers are counting every penny on the same evening, that is not a market finding its level but a trade being hollowed out from underneath. Consider the scale of the loss: 161 pubs closed across England, Scotland and Wales in the first quarter of this year alone, which is more than two a day. Those closures took roughly 2,400 jobs with them. There is a huge difference between losing a pub in a city and losing one in a village. When an urban pub closes, a community loses an option, but when a rural pub closes, a community loses its social space, which almost never comes back. The rural pub sits alongside the church and the village hall as part of the fabric of some of our smaller communities. Such closures represent a loss of identity and cohesion in communities such as mine. We should ask, “Why is the rural pub more exposed?” They tend to have lower footfall, they tend to face higher energy and supply costs, and it is far harder for them to diversify their income. Running costs across hospitality are up around 43% since 2019, and one third of those businesses are operating at a loss.