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Morning Briefing Strap Line
Fri 20th Sep 2013 - Friday Opinion
Subjects: VAT realities, personal licences, beer snobs and localism versus parochialism
Authors: Tim Martin, Paul Charity, Jean-Paul Russek and Paul Chase

Waking up to the realities by Tim Martin

“The best way to realise your dreams”, said boxing legend Muhammad Ali, “is to wake up.” The pub trade is slowly waking up to the fact that it has been living under an unfair tax burden for many decades, and that its argument for tax parity with supermarkets has an unassailable logic. Why should pubs pay 20% VAT on food sales when supermarkets pay nothing, and why should pubs pay so much more VAT and rates per pint sold as well? The heart of the case is that pubs pay far more taxes in general per pint or per meal than supermarkets and also create more jobs.

The changes we seek, by encouraging people to use pubs and restaurants, will improve the economy and preserve the historic institution of the pub – 15% of which have closed down in the last decade. The government and the public yearn to revive moribund high streets and our proposals will provide a massive shot in the arm in this sphere, especially in poorer areas, where customers struggle to afford the price differential created by the current tax regime. Pubs, restaurants and coffee shops provide about a third of the outlets for successful shopping centres, so our VAT proposals will do far more than even Mary Portas could contemplate in this vital area of the economy.

Momentum is building in a huge way and Tax Parity Day, thanks to the work of Jacques Borel’s Vat Club, seems certain to gain far more publicity than any event in the last 30 years. In recent days Hall and Woodhouse and McMullen’s have issued pithy and succinct press statements backing the campaign and 1,000 Indian restaurants have also joined the cause. Most encouraging of all, hundreds, and maybe thousands, of individual publicans and restaurateurs are nailing their colours to the mast and plan to lower prices by 7.5% next Wednesday.

As always, even a just and beneficial cause like the VAT campaign produces its share of carping critics and nitpicking ninnies. Some people seem to take exception to the campaign being run by an ancient Frenchman on a mission – not since 1066 has a French-run campaign created such a stir in the shires of Old Blighty, give or take a few goals by the legendary Thierry Henry. “Why is he doing this, how much money is he making, is it all a con?”, we are asked. Sacre bleu, guys, give it a rest. You’ve got to know when to jump on a winning bandwagon and back an honourable cause. Everyone is entitled to earn an honest buck, including Jacques the lad. We’ve paid him far less than some hard-working trade organisations and believe the VAT Club is excellent value for money. No one doubts Jacques’ energy, commitment or winning track record, surely.

So this is a call to arms – the time has come to support fair taxes for pubs and restaurants. 10,000 pubs closing down in the last few years is a clear sign that the current tax regime is unsustainable. The status quo of supermarkets paying a fraction of pub taxes per pint must end now. It’s time to support Tax Parity Day and join the VAT Club, if you haven’t already. The times are a-changing, and as Bob Dylan put it “we’d better start swimming or we’ll sink like a stone.” Let’s heed those wise words.
Tim Martin is chairman and founder of JD Wetherspoon

Be careful what you wish for by Paul Charity

The Conservative-led coalition government is keen to reduce red tape and unnecessary administrative burdens on business. The decision to shelve minimum pricing and the ban on multi-buys in favour of the voluntary approach of the Responsibility Deal exemplifies this. In general, this is to be welcomed, but then, out of the blue, we have a consultation on the abolition of the personal licence.

The government has championed ‘localism’ as well as cutting red tape, and this proposal appears to touch both these policy bases. It may be that this has a superficial appeal to some in our sector, but be careful what you wish for.

Abolishing the personal licence begs the question “what will replace it?” The government’s answer is to gold-plate the role of the Designated Premises Supervisor (DPS) and make him or her the only person able to authorise alcohol sales in licensed premises. Whilst the government will retain control of criminality-check criteria and training standards, whether such checks and training take place in a given premises will depend on whether a licensing authority makes it a condition on the premises licence. Each licensing authority would have to evolve a policy for deciding what types of premises and categories of staff would require training and vetting – and this could include not just DPSs, but bar and counter staff as well. We could end up with a system like Scotland’s, where anyone involved in selling alcohol has to be trained in legal compliance.

It is curious, to say the least, that government would implement a desire to cut red tape and cost burdens at a national level in a way that opens the door to them being increased at local level. The training and licensing of persons was never meant to be targeted; it represents the minimum set of standards in respect of training and vetting that is consistent with protecting the public and promoting the licensing objectives. Over 550,000 people have gained the personal licence qualification since 2005, and let’s face it, this cascade of training and qualifications would never have been achieved but for the introduction of a qualifications-based licensing system.

Most premises have adopted a precautionary approach and ensure that they have more than one personal licence holder working on the premises, even though this isn’t a legal requirement. This has become spontaneously established as best practice by a sector that is conscious of the public scrutiny it receives. It seems bizarre for the government to create perverse incentives to reduce training and qualified supervision by enhancing the role of the DPS. The government has also mooted the possibility that there might have to be a fresh criminality check if the DPS is changed at a premise. This will take away one of the key flexibilities of the current system, whereby another personal licence holder can take over the role of DPS at short notice.

Licensing authorities already have the power to impose extra training conditions on premises licences and frequently do so at licensing reviews. Training in responsible alcohol retailing and drugs awareness are just two examples that come to mind. At the moment multiple operators have complete clarity on what training and criminality checks are required of their DPSs and other personal licence holders. If the government abolishes personal licences, operators will have to familiarise themselves with 400 individual licensing policies and keep up to date with revisions to them if they are to ensure legal compliance. Which is easier to administer – a coherent, national system or a pick-and-mix local option?

The personal licence system is one of the success stories of the Licensing Act 2003. The industry lobbied for the separation of the licensing of premises from the licensing of persons and it has worked well. I believe personal licences should be retained and the government should avoid the temptation to throw out necessary regulation along with unnecessary regulation. Babies and bath water come to mind.
Paul Charity is managing director of Propel Info

So are you a Beer Snob? By Jean-Paul Russek

In response to Martyn Cornell’s recent Friday Opinion article about ‘Beer Snobs’, I thought I should help Propel readers to check if they are one themselves. So do you think you may be a beer snob? Take this test:

1.  No matter how many hand pulls a pub has you wish they had one more.

2.  When you choose an ale you will gravitate to one from a brewery you’ve never tried before, preferably never even heard of, and if it’s from a location you never knew existed, so much the better.

3.  If faced with a line up of ‘national’ (yet perfectly decent beers) like say Doom Bar, Green King IPA or Bombadier your heart sinks a little.

4.  Knowing the names of the latest breweries and what ale ‘temples’ such as the Craft Beer Company stock is critically important to you.

5.  Bigger brewers’ use of the word ‘craft’ horrifies you even though it may be legitimate.

6.  You stop drinking beers from any brewer whose volume is 50,000 barrels-plus a year no matter how good their beer may be.

7.  You dismiss a beer the moment a ‘larger’ brewer has taken it over no matter how few changes, if any at all, have been made to that beer.

If you answered yes to most of these, welcome – you are pretty much a Beer Snob.

So is this a bad thing? Of course not, unless you overindulge in, say, Siren’s wonderful ‘Sound Wave’. Actually, the market seems to actively encourage beer snobbery:

• Ale choice in most pubs and bars is higher than ever, thanks to purchasing agreements and distribution whether tied or not. SIBA’s DDS (Direct Delivery Scheme) is one of many factors that have helped. I see an ever-improving choice on my travels, not just through my work in the trade, but having visited 1,300+ pubs in the last year on the Cask Marque ale trail. We surely lead most of Europe with our choice.

• Cities actually compete on the number of ale choices available through Camra surveys (with Derby and Norwich currently at the top of the tree).

• We just learned from the Good Beer Guide there are 1,147 breweries in the UK and many more in development. The new breweries feed the appetite for beer lovers, often with new innovative variations.

• Beer Snobs love a great choice at festivals where they are able to sample lots of beers. The number of these festivals seem to be increasing, not just larger Camra branch-organised ones, but smaller more humble pub ones, or village halls or steam railways.

• The new wave of Craft Beer events also fuel the Beer Snobs’ appetite – London’s Craft Beer Rising held last February, Birmingham’s Beer Bash in July, London Craft Beer Festival held last month and in October the Independent Manchester Beer Convention to name but a few. These tend to mix cask and keg ale but all under the ‘strict’ craft beer banner.

• Beer Snobs may not be so concerned at the Cask versus Keg debate, preferring to decided for themselves what is ‘good beer’.

But beer snobbery needs a balanced perspective. Beer Snobs need to be cautious before traditional large breweries are dismissed just for their size. In the 1970s, when brewing cask was in decline, out-of-vogue brewers like Greene King still stuck to their cause. Some of the new wave of microbrewers may come and go (as happened in the US in its last craft beer expansion then demise in the mid 1990s) but older traditional brewers will still be on the landscape, with their larger balance sheets meaning they are able to ride out any future storms. Beer Snobs should welcome their presence while enjoying the sheer delights of the huge range of beers and beer styles now available.

So how should the trade embrace Beer Snobs?

1.  Consider your range carefully, balancing a well-known ‘Steady Eddie’ ale with a rotating choice to give Beer Snobs something to explore and sample.

2.  All of us in the industry need to be passionate about the beers we have tried and enjoyed, from whatever size brewery. We should shout about our favourites yet be open to try new ones.

3.  More partnership brewing such as with top USA craft breweries – Marston’s collaboration with Shipyard Brewery and Wells & Youngs with Dogfish Head were both great examples.

4.  While stocking one decent real ale in top condition is better than stocking six poor ones, if you forever just stick to one, Beer Snobs may get bored.

The increasing number of beers available to us is to be welcomed, because beer snobbery should not be anti large brewers but about pro choice.
Jean-Paul Russek is a Regional Cask Beer Champion and a PDM for Punch Taverns as well as a Cask Marque Ambassador

Localism or Parochialism by Paul Chase

I’m a great believer in the efficacy of local partnership working, whereby all the stakeholders work together to solve local licensing problems in a targeted and effective way. In cities like Liverpool and Birmingham we have excellent examples of how local police, licence holders, door supervisors and voluntary organisations work together to manage the night-time economy at weekends to ensure people have a safe and enjoyable night out. Effective CCTV monitoring of premises and public spaces, taxi marshalling schemes and street pastors are further examples of the effectiveness of this local approach. And government has repeatedly expressed its support for schemes like Best-Bar-None, Purple Flag, PubWatch and Business Improvement Districts (BIDs). This is true ‘localism’.

City centre night-time economies share very similar problems, but local application of these national, voluntary schemes ensures flexibility. Into this mix the government has seen fit to throw EMROs and the Late Night Levy. When I attended the National Training Event of the Institute of Licensing last November, a show of hands in a room full of council licensing officers indicated that only two councils were, at that time, considering either of these measures. Now, like a malignant virus, consideration of these measures is spreading around the country.

Reducing the cost of local policing beyond 2am in order to meet central government cost-cutting targets, and using the licensed trade as a milch-cow is what motivates this. It isn’t that things are getting worse, in terms of the night-time economy or alcohol-related offending, they’re not; they’re getting better. These measures are disguised as being about crime prevention when in fact they are about central government cost-cutting. Putting them forward as examples of ‘localism’ is just a way of passing the buck.

Which leads me to a new development that also arises out of the need for central government to cut costs: policy, we are frequently told, must be evidence-based. So what are we to make of the fact that the Office of National Statistics (ONS) is consulting on measures designed to save around £1 million a year? What do they propose to cut? Amongst other things, they propose to abolish the General Lifestyle Survey, Health Statistics and Analyses, Life Events, and Health Inequalities Analysis. Should we be bothered? Well, these statistical surveys give us information about things like trends in alcohol consumption, including the frequency and amount of alcohol drunk by people over a set period of time and alcohol-related deaths; social inequality and gender data in relation to alcohol-related deaths are also included in these surveys.

Why this matters is that these are objective sources of information that can assist government, both national and local, to formulate policies and to legislate. If we create an objective information vacuum then the problem-inflation of lobbyists with an anti-alcohol agenda will fill that space. And with local authorities now charged with responsibility for ‘promoting public health’, evidence will be replaced by prejudice. This isn’t localism, it is parochialism and it will encourage the worst kind of busy-body meddling. In the absence of straight statistics, how will government, and how will we be able objectively to judge the scale and size of a problem and whether a particular solution has worked or not?

Another example of the confusion of localism and parochialism is the recent proposal to abolish personal licences, and to replace a national scheme of vetting and licensing that everyone understands, with a patchwork quilt of local licensing conditions on training and vetting that will create a nightmare for national operators. And to present this as a cost-cutting exercise that will save the trade money is simply ludicrous: it will increase both costs and complexity.

This proposal resembles the earlier proposal in 2010 to abolish the Security Industry Authority (SIA) – just get rid of it – and then what? Go back to local licensing? I recall that people weren’t terribly enthusiastic about the SIA at the time of its creation, but the security industry embraced it, invested in it and made it work. Having done all this they protested about the government’s plan to abolish it. The government eventually repented and decided to keep the SIA and modify the licensing system. One can only hope that a similar, evolutionary approach to the personal licence system will eventually prevail at the Home Office.

True ‘localism’ has to be built on something. Central government mustn’t withdraw from the need to set national, minimum standards and expect local councils to step into the breach. That’s confusing localism with parochialism.
Paul Chase is a director of CPL Training and a leading on-trade health and alcohol policy commentator

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