Government aid to boost pub sector

Government aid to boost pub sector

The UK Government has launched an aid programme for the struggling pub sector, backed by GBP4m (US$6m) in public funding.

Pubs minister John Healey today (19 March) announced a 12-point action plan to help community pubs.

Earlier this year, Prime Minister Gordon Brown asked Healey, who is also the housing minister, to examine how the Government could aid the pub sector. Around 40 pubs are closing down every week, according to the latest British Beer & Pub Association figures.

"Today’s measures are a much needed shot in the arm for publicans in these tough times," said Healey.

Up to GBP1m of the GBP4m in funding will be given to improve business advice available at the 'Pub is a Hub' group, a support service for community pubs.

Around GBP3.3m will help to empower communities to buy into struggling local pubs. It is anticipated that the funding will be matched by private sector investment and could be enough to fund the takeover of 50 community pubs over the next three years.

Councils, meanwhile, will be given new powers to prevent pubs from being demolished, the Government said.

Healey said that ministers are also in favour of relaxing the so-called 'beer tie' system, which forces pubs to source beer from their parent pub company. New industry rules, agreed with Government, will mean that pubs can buy in local guest ales, outside of their beer tie.

"If the industry does not fulfil its promise [on beer ties], Government will legislate to open up the market," said Healey.

He added that there will be three independent studies "to identify where further support can be offered and to ensure the long-term viability of pubs".

Despite the measures, there has been no assurance from the Government on duty tax for alcoholic drinks, which is set to rise by 2% above inflation in the 2010 Budget - to be announced next week.

Drinks trade bodies have called for a freeze on duty, arguing that more rises will hit jobs, as well as Government tax revenue. Tax on beer has risen by 20% in the last two years.