So there’s a pretty significant event coming up in the UK which will decide for the next 5 years how the country is run, and who exactly it is run by. The General Election, on Thursday May the 7th, is in full swing with every party promising everything under the sun for votes, berating each other for these promises and in sum making it confusing for you, the electorate, to establish what they actually stand for. Specifically, what will the result of the Election mean for you, the Landlord?
To make this decision easier for you, here at Barcode we’ve separated the wheat from the chaff of the political rhetoric, and established the Party’s key pledges and how it will effect you. Namely, we’ve broken it down to ‘Pub Pledges’, ‘Small Business Policies’ and views on ‘Minimum Wage’. It’s a narrow spectrum, but nevertheless we think these are some of the key issues that Publicans will be looking to over the next 5 years.
It is widely recognised that there are now 4 major parties in England, so apologies to the Greens and the Monster Raving Looney Party in advance, but here are the main policies that each Party has ensured that will be implemented within the new Parliament.
The Conservative Party
The blue side of the Coalition Government have already scrapped Gordon Brown’s Beer Tax Escalator, and cut 3 pennies off the price of a pint over the last three years. But what do they pledge for pubs over the next 5 years?
Pub as an “asset of community value”.
The Pubs Minister Kris Hopkins has recently pledged to bring forward legislation in England for pubs to listed as an “asset of community value”. Under this blanket term, this will trigger a removal of the national permitted development rights for the change of use or demolition of those pubs that communities have identified as providing the most community benefit.
Hopkins goes on record to say that: “this provides the right balance between protecting valued community pubs, but avoiding blanket regulation which would lead to more empty and boarded up buildings…This will mean that in future where a pub is listed as an asset of community value, a planning application will be required for the change of use or demolition of a pub. This then provides an opportunity for local people to comment, and enables the local planning authority to determine the application in accordance with its local plan, any neighbourhood plan, and national policy.”
“This government recognises the economic, environmental and social benefits of allowing redundant buildings to be converted into productive uses without excessive red tape”
Small Business Policies
The Conservatives claim that by backing small businesses and enterprise, they have helped create 1.9 million new jobs, predominately through small businesses, such as Pubs. Here is a breakdown of their pertinent small business policies:
- Cutting the jobs tax – saving businesses up to £2,000 and enabling them to provide more jobs for people
- Scrapping the jobs tax altogether for under 21s – so it’s easier for businesses to give young people a start in life (I.E behind a bar)
- To reduce the impact of the increase in National Insurance (NI) to 13.8 percent by raising the primary and secondary NI tax thresholds (for lower earners).
- To exempt new businesses from paying NI on their first ten employees for year for two years, which is good news for the cash flow for Pubs starting up.
- To simplify the tax system by cutting the main rate of corporation tax to from 28 pence to 20 pence for small companies and remove complicated tax reliefs.
Many commentators have argued that by raising the NMW this may increase costs to a business through higher wages or to the consumer, from the costs being added onto the products on sale. There is no definitive answer to this, but it is something that all Landlords should keep an eye on.
The Tories have increased national minimum wage will increase by 20p an hour to £6.70, which is the highest rise in NMW in over seven years.The hourly rate for younger workers will also rise, and for apprentices it will go up by 20% – or 57p – to £3.30 an hour. The Con/Lib coalition claim that this provides “more financial security” to 1.4 million workers it is set to benefit. It is not yet clear if this wage will rise again over the next 7 years, with Labour criticising that the Tories have “broken their promise” over a preposed rise to £7
The Labour Party
So what do the opposition have in store for the pub industry? And what have they done over the course of the last Parliament for the industry?
If you’re all for the abolishment of the Beer Tie you can thank the Shadow Pub Minister, Toby Perkins, who originally chaired the opposition to the century-old policy.
Perkins claims that by ending this tie this ends the tenet that landlords can only buy products from their PubCo, which has led to limited products at inflated prices.
Labour would also like to see two more policies enacted if they are to be in power at the next Parliament, namely:
- When a new licencee takes over a pub, or when an existing rent contract expires and is renegotiated, there should be a fully transparent and independent rent review completed by a qualified surveyor.
- There must be a truly independent body to monitor the regulations and adjudicate in disputes between licencees and pubcos.
Labour politicians have also lent their support to a pledge backing local pubs and Britain’s 1300 breweries through formal endorsement of CAMRA’s campaign.
Small Business Policies
Labour claim that they are determined to “help small firms with the cost of doing business”, and have set out 2 clear ways in which to do that.
- Rather than a further cut in corporation tax for multinationals and large companies, Labour will instead cut and then freeze business rates specifically for small and medium-sized firms. Labour claim that while another blanket corporation tax cut would benefit just 80,000 firms, or two per cent of British businesses, a cut in business rates will mean an average saving of over £400 on 1.5 million properties, helping those businesses where cash constraints have the biggest impact.
- Labour will freeze energy bills until 2017 while they reform the energy market, so that bills can fall but not rise. This will benefit 2.4 million businesses across Britain and save them £1.5 billion in total. Labour will ensure that energy companies are banned from offering unfair contracts and rolling small businesses over on to more expensive tariffs without their consent
Labour were very critical of the Con/Lib rise to only £6.70 in the NMW, and have therefore promised that the minimum wage would rise to £8 an hour over the course of the next parliament if it wins in May.
“This is our aspiration. We are more ambitious for the British people than this lot in office,” shadow business secretary Chuka Umunna told the BBC.
The Liberal Democrat Party
The Lib Dems have been in coalition with the Tories for 5 years now, and having broken several of the 2010 pledges see their support at an all time low. However, in the run up to the election Clegg and co have made a deliberate effort to divorce themselves from the Conservatives. Here’s how they claim they can help your Pub…
After their York Party Conference in 2014, Greg Mulholland MP cemented several policies under the umbrella of “A Better, Fairer, More Sustainable Future for British Pubs“. Notable policies include:
- The Liberal Democrats have committed to introducing a right for pub tenants to buy the freehold of their venue if it’s put up for sale at an independently assessed market value. The party said it would change the planning system so no pub is given change of use or permission to demolish without it being offered a “fair market price” and properly advertised for sale for at least six months
- In addition the Lib Dems supported proposals for enshrining into law the principal that tied tenants should not be worse off than their free-of-tie counterparts, as part of its support for reforms proposed by the Department for Business, Innovation and Skills
Mulholland claims that this backs the Fair Deal for Your Local campaign, which was against the Beer Tie last year.
Small Business Policies
The Lib Dems claim no less than 4 ways by how they can help small businesses. These are:
- Many small businesses complain of late payment by government and big businesses. Through the Small Business, Enterprise and Employment Bill Liberal Democrat minister Vince Cable plans to force large businesses to publish how long they take to pay invoices in their annual accounts.
- Many small businesses complain of difficulties in obtaining business finance. The British Business Bank, again sponsored by Liberal Democrat minister Vince Cable, is providing guarantees and finance for lenders that is intended to ease the difficulties small businesses find in obtaining bank finance
- Many small businesses complain that their business rates are unfair. The coalition government has introduced rate relief for small businesses and Liberal Democrat minister Danny Alexander has announced a major review of the business rate system
- The Liberal Democrats pre-manifesto commits to maintaining the Apprenticeship Grant for Employers throughout the life of the next Parliament
As referenced earlier in this piece, the current rise of £6.70 to the NMW was a Tory/Lib Dem Policy. Liberal Democrat Business Secretary Vince Cable has defended the newly announced rise in the minimum wage, after critics claimed it did not go far enough.
Mr Cable hit out at the criticism. He said: “People who say it is nowhere near enough need to explain how else we do it.”He accused some of wanting to set the rate “on a political basis …that is not sensible”. But he added: “As far as people on low pay are concerned of course I want to see wages go up as the economy improves“.
Mr Cable i, however planning to launch a national minimum wage accelerator. This is an online tool which will make it easier to compare rates of pay across regions, sectors and occupations.
The tool is designed to allow workers to compare wages with others in their sector and region to see if they are being adequately compensated for work done in their region.
The UK Independence Party
Last but not least, UKIP have seen a recent surge in popularity over the last year, which can be mainly due to the popularity of beer-swilling Nigel Farage (after googling “Farage Beer” about 200 images popped up). However what are their plans for your pub?
UKIP have branded themselves as the ‘political party of the pub’ and with their longstanding ‘Save the Pub’ campaign it’s easy to see why.
If UKIP were to gain a seat within Government (as an overall majority is pretty much impossible for them) they would:
- Repeal the smoking ban. UKIP state that the undemocratic smoking ban was a major kick in the teeth for those pubs that offered somewhere for people to enjoy a pint and a smoke at the end of a hard day. Great Britain used to be the country of tolerance, compromise and fairness – in the case of the smoking ban these values were nowhere to be seen. The ban was put in place which of course has had a devastating effect on the nation’s pubs.
- Reduce tax on a pint from 99p to a flat 35p tax rate, reducing the cost of a drink by a 3rd.
Deputy UKIP Leader Paul Nuttall MEP is spearheading UKIP’s Save the Pub campaign. UKIP believes that the other political parties have lost touch with reality and are nothing to protect the pub. Up and down the land hundreds of once great British boozers are closing down resulting in unemployment and broken communities.
Small Business Policies
UKIP simply state that they would not seek to remain in the European Free Trade Area (EFTA) or European Economic Area (EEA) while those treaties maintain a principle of free movement of labour, which prevents the UK managing its own borders. If there demands are met then they will be able to enact the following policies:
- Businesses should be able to discriminate in favour of young British workers.
- Repeal the Agency Workers Directive.
- Conduct a skills review to better inform our education system and qualifications
- Encourage councils to provide more free parking for the high street.
- Simplify planning regulations and licences for empty commercial property vacant for over a year.
- Extend the right of appeal for micro businesses against HMRC action.
UKIP leader Nigel Farage said an influx of unskilled labour from across Europe had driven down the cost of labour in the UK and the “minimum wage had become the maximum wage” for many British workers.
“Rather than helping people on low pay it has put a glass ceiling on them,” he told the BBC’s Daily Politics.
The national minimum wage has increased broadly in line with average earnings since 2006 and was at its highest relative to average earnings growth in October 2013
So there we have it. We hope this clears the jungle of policy up for you and goes to show that despite the popular opinion that ‘politicians are all the same’, it shows that all Parties have differing policies that mean different things for your Pub. Obviously in the run up to the election keep your eye out for speculative policy agreements or withdrawals to win your vote. But most importantly please remember to register and vote on May the 7th!