No, Labour will not kill off the British pub as an institution. But it will kill off a lot of pubs

Is Labour about to kill off the British pub? It’s a question that’s being asked, with the government’s opponents latching on to a recent Times column written by Jeremy Clarkson. In it, the celebrity, who was recently paid a visit by Tory leader Kemi Badenoch, wrote that it was nigh on impossible to make money from his Cotswolds boozer even when it was packed.

Helped no end by the high profile of its owner and the publicity it gets from that, The Farmer’s Dog is a popular venue. But Clarkson said the venture had been a “total disaster” and that it will lose him “a fortune” while causing him to develop “a skin disease from the stress of running it”.

It was actually a rather good-humoured piece, which didn’t mention the chancellor, Rachel Reeves, and took aim instead at the light-fingered patrons thieving glasses – not to mention their dubious sanitary habits, which on one occasion required the hiring of specialist cleaners in hazmat suits. And at Brexit – of which Badenoch was a vocal supporter – which has made it tough to find and keep bar staff.

However, it also noted the figure of two pub closures a day nationwide, which plenty of other pub owners have jumped on to suggest that Reeves’s tax raises spell doom for the industry.

Between 2022 and 2023, the closure rate was actually rather lower than that. Figures from the British Beer & Pub Association show that 500 pubs called last orders for the final time during this period, at a rate of just under one-and-a-half a day. The number of pubs in Britain has been in long-term decline, but the rate has recently slowed. That is almost certainly poised to change as a result of the Budget.

The problem with Reeves’s increase in employer national insurance contributions, which I have been writing an awful lot about in recent days, is not just that it increases the tax on jobs from 13.8 per cent to 15 per cent; the threshold at which it kicks in is being lowered. From April, employers will start to pay at £5,000, compared with the current figure of £9,100. The pain from this will be felt disproportionately by businesses that employ lots of lower-paid workers. They will also have to deal with the minimum wage rising by 6.7 per cent to £12.21 an hour.

The latter is a welcome development. Poverty pay is a social evil. But the hard truth is that when you combine the rise with a sharp increase in the tax on low-paid jobs, you hit employers with a double whammy.

It is still perfectly possible to make a profit from pubs, particularly if you don’t operate with self-imposed hurdles such as Clarkson’s promise to use only British produce.

A look at the latest results from JD Wetherspoon, run by the similarly opinionated Tim Martin, shows a business in rude health, with pre-tax profits leaping to £73.9m up from £42.6m the previous year. The company also trumpeted the potential for it to run “1,000 pubs in the UK”.

One of the pubs it has closed, The George in Wanstead, is soon to be reborn as an upmarket hostelry serving the area’s prosperous residents. Its original name, The George and Dragon, is being restored under the stewardship of one of the indie chains that have sprung up in recent years. Urban Pubs and Bars touts its own highly impressive growth on its website.

That’s not to say that running pubs is easy. Au contraire. Britons have an image of the traditional boozer, fostered by soap operas such as Coronation Street and Eastenders, as the centre of the community. But they sometimes treat it like the Church of England. They like the idea of having it around, but an increasing number of them don’t go there, except maybe at Christmas.

Fortunately, for those relying on it to earn a crust, the industry is showing rather more resilience and adaptability than the scandal-hit C of E. The trend is towards larger pubs that can serve more people, offer food, and benefit from economies of scale.

More low- or no-alcohol options are being made available to cater for the increasing number of people, especially from younger generations, who shun booze. No longer are you restricted to a limited range of overpriced soft drinks. You can now buy highly drinkable beers and lagers that you can drive home after consuming without running the risk of killing someone.

But prices are set to rise as a result of the tax hike. And there will be some businesses at the margins, particularly smaller ones, that go to the wall as a result of the daunting rise in costs they face at a time when hospitality, more generally, has been under a cloud, having faced a hard road to recovery post-pandemic and grappling with low consumer confidence.

This is something the chancellor needs to consider in her future Budgets, not least because most publicans aren’t celebrities with newspaper columns, TV shows and fortunes to put into a hobby business. Despite what its critics claim, Labour will not kill off the British pub as an institution. But I fear that its current policies will kill off a lot of pubs.