We must reduce business rates and our beer duty

Further red tape, through costly new legislation, is not the right solution, believes Brian Davidson

Scotland’s 4800 pubs are at the heart of our social lives. They are also a vital part of the Scottish economy. Brewing and pubs are worth £800 million each year, and support nearly 60,000 Scottish jobs.

It’s a dynamic and innovative business with many great success stories. However like pubs elsewhere in the UK, recent years have been challenging. We’ve seen many pubs close, with a heavy tax burden and increasing regulation taking its toll on the sector.

That’s why we should always be wary of proposals to increase the burden of red tape, as proposed by CAMRA’S Colin Valentine in The Scotsman, on 20th July.

He was supporting a proposed Scottish Parliament Bill drawn up by Labour MSP Neil Bibby. The bill seeks to replicate a recent piece of Westminster legislation which would create a pub Code Adjudicator to regulate those companies operating ‘tied’ pubs in Scotland.

The beer tie is a well-established feature of the pub industry which allows pub tenants to enter the pub trade with very little up-front costs and a lower fixed rent in return for higher prices for their beer from the pub operating company. Companies also provide a range of other business support measures and the partnership approach also supports long-term investment in pubs. In England and Wales, six companies which operate over 500 pubs are covered by the Code. However the Scottish pub market is very different to that in England and Wales. Just 17 per cent of pubs in Scotland operate under a tie, compared to 40 per cent in the UK as a whole.

Colin Valentine’s assessment that there is no code of practice for pubs in Scotland doesn’t paint an accurate picture. It’s true we don’t have a statutory system, but we do have our own industry code.

This Scottish code which launched in July last year was a landmark for the industry, designed specifically for Scotland with the involvement of both pub companies and tenants’ groups. Previously, there was a Uk-wide voluntary code in place.

The code ensures that Scottish tenants unhappy with their rent or other aspects of their relationship with their pub operating company, can initiate independent arbitration carried out by assessors based in Scotland.

The tied-pub model in Scotland offers great opportunities for new pub entrepreneurs and is great for jobs and investment. In the last two years alone £20 million has been spent by pub companies and brewers in Scotland investing in pubs.

What really matters to Scotland’s pubs is that politicians in both Holyrood and Westminster listen to the needs of the Scottish pub industry.

We need action to reduce the burden of business rates and beer duty, which are both very big burdens on pubs. Further red tape, through costly new legislation, is not the right solution. ● Brian Davidson is President of the Scottish Beer & Pub Association and is Punch Taverns’ operations director for Scotland. The SBPA represents Scotland’s brewers and pub companies and is part of the British Beer & Pub Association.