Blogs from the Blackstuff
Blogs from the Blackstuff
Professor John Clancy and Professor David Bailey
Blogs from the Blackstuff
Blogs from the Blackstuff
Blogs from the Blackstuff
By Professor David Bailey & Professor Philip Tomlinson
26th October 2026
Prime Minister Andy Burnham and Chancellor John Healey recently sat down in a pub, enjoyed a beer and debated the merits of pork scratchings, scampi fries and crisps. It made for an entertaining social media video. But if the government is serious about protecting Britain’s pubs, the Chancellor needs to do more than demonstrate his knowledge of bar snacks. He needs to change the economics of running a pub.
The stakes are high. Pubs are businesses, employers and an important part of Britain’s social infrastructure. They sustain local jobs, support breweries and food suppliers, attract people to high streets and provide places where communities come together in ‘third places’. Yet many face an uncomfortable combination of rising costs, tax pressures, squeezed margins and property arrangements that can make keeping the doors open increasingly difficult.
Our recent paper, Last Orders? Pub Closures, Policy and the Future of the Public House in the UK, authored with Dieter Kogler, argues that the crisis cannot simply be explained by changing consumer tastes or an inevitable, long-term decline in pub-going. The sector has faced a post-pandemic perfect storm, with public policy, business costs, pub-company financial arrangements and the competing value of pub properties all helping to shape its prospects. The central contradiction is clear: politicians celebrate pubs as the heart of their communities while the economic environment can make it increasingly difficult for them to survive.
The Chancellor’s Budget is an opportunity to address that contradiction.
Firstly, fix business rates properly.
Business rates should be at the top of Healey’s list. The 2026 revaluation left many pubs facing substantial increases in their rateable values, while the ending of pandemic-era relief added to the pressure. The government has responded with additional relief, including a 15% reduction for pubs in 2026/27 and a further 20% reduction announced by Burnham for 2027/28. The latter is expected to save a typical pub around £1,100 next year.
That is welcome, but temporary discounts are not a substitute for a system that works. A pub’s rateable value is not its profit. High turnover does not necessarily mean healthy margins when wages, energy, stock, rent, insurance and maintenance must all be paid. The government has recognised concerns about how pubs are valued and announced a review, but publicans need confidence that the outcome will address the underlying problem.
Healey should use the Budget to commit to a durable, transparent system of business rates for pubs, with valuations that better reflect the realities of the sector. He should also provide a clear timetable for reform and avoid a cycle in which businesses must repeatedly lobby for emergency relief whenever their bills rise.
Secondly, give pubs a fairer tax deal.
Pubs compete against supermarkets and off-licences that can sell alcohol at prices a hospitality business cannot match. A pub offers service, premises, employment and a social experience, but its cost base is fundamentally different from that of a retailer selling alcohol for consumption at home.
The Chancellor should examine whether the tax treatment of draught beer can do more to support pubs, building on the existing draught-duty relief. Any change must be consistent with public-health objectives and should not be a blanket subsidy for alcohol consumption. The case is for a more intelligent system that recognises the difference between drinking in a pub and buying cheap alcohol for home consumption.
Healey should also assess the case for targeted VAT relief for pubs and hospitality businesses. A reduction would not automatically be passed on to customers, and it would not solve every problem. But properly designed and evaluated support could help viable businesses invest, retain staff and manage cash flow. The government should examine the evidence rather than assume the current tax burden is beyond debate.
Thirdly, confront the problems in the pub business model.
Our Last Orders? paper highlights the importance of looking beyond taxation to the ownership and financial structures of the industry. Some publicans operate under agreements with corporate pub-owning companies (PubCos) that can involve substantial rents, tied purchasing arrangements and limited flexibility over costs. These arrangements differ, and not every pub company operates in the same way. Nevertheless, the balance of risk between property owners and pub operators deserves serious scrutiny.
A publican can work exceptionally hard, attract customers and build a successful local business yet still struggle if too much of the revenue is absorbed by rent, purchasing costs and other contractual obligations. The government should strengthen transparency around pub tenancy agreements, ensure access to effective dispute resolution and assess whether existing protections give tenants a fair chance of earning a sustainable living.
There is also a wider property problem, which we call the ‘prime land’ paradox. A pub building may be worth more for housing or another commercial use than it is as a working pub. This creates a financial incentive to close premises even when they remain important to the local community. Planning protections and assets-of-community-value provisions can help, but communities need practical access to finance and time to purchase threatened pubs before they disappear.
The Budget should support community ownership and viable pub transfers, particularly where a pub provides an essential local service and has a credible business plan. Community ownership and micropubs can offer more resilient alternatives in some circumstances, although neither is a universal solution. The objective should be to give viable pubs a chance, not to preserve every business regardless of its prospects.
Fourthly, invest in pubs as part of local economic development.
A pub does not exist in isolation. It can support nearby shops, restaurants, cultural venues, tourism and local suppliers. Its closure may reduce footfall and accelerate the decline of a high street or village centre. This wider economic contribution is rarely captured in the pub’s accounts, but it matters to the communities that lose one.
The Chancellor should connect pub policy to a broader high-street and regional development strategy. Targeted grants or low-cost finance could help viable pubs invest in energy efficiency, accessibility, kitchens, live entertainment and other activities that diversify their income. Support should be conditional on credible plans to improve long-term viability, rather than simply subsidising businesses with no realistic route to sustainability.
The government should also recognise the diversity of the sector. A traditional wet-led pub, a food-led establishment, a rural community pub and a micropub face different challenges. Policy designed around an assumed average pub risks missing the particular pressures affecting different business models and places.
Finally, measure success by whether pubs survive.
The government should publish regular data on pub openings and closures, employment, investment and the geographical distribution of support. It should evaluate whether tax relief and grants improve business survival, encourage investment and protect jobs, while being honest about the limits of what government can achieve. Not every pub can be saved, and changing consumer preferences will continue to matter. But policy should not accelerate closures that could be avoided through sensible reform.
Burnham and Healey deserve credit for recognising that pubs matter and for announcing additional business-rates support. Their pub visit was a useful reminder of the social role these establishments play. But the real test will not be which snack wins a blind ranking. It will be whether publicans can pay their bills, invest in their businesses and earn a reasonable return.
Our Last Orders? paper argues that pub decline is not simply an inevitable cultural shift. It is also a question of economics and policy. The Chancellor should use the Budget to reform business rates, consider a fairer tax treatment of pubs, improve the balance between pub owners and tenants, and help viable establishments invest and remain part of their communities.
Otherwise, the government’s affection for the British pub will remain a performance rather than a policy. And in communities across the country, the last orders bell will keep ringing.
Professor David Bailey works at the Birmingham Business School and is a Senior Fellow at the UK in a Changing Europe Programme.
Professor Philip Tomlinson works at the University Bath Management School and is Co-Director of the Centre for Governance, Regions and Industrial Strategy.
Print version here
John Clancy and David Bailey
Prime Minister Andy Burnham and Chancellor John Healey recently sat down in a pub, enjoyed a beer and debated the merits of pork scratchings, scampi fries and crisps. It made for an entertaining social media video. But if the government is serious about protecting Britain’s pubs, the Chancellor needs to do more than demonstrate his knowledge of bar snacks. He needs to change the economics of running a pub.
The stakes are high. Pubs are businesses, employers and an important part of Britain’s social infrastructure. They sustain local jobs, support breweries and food suppliers, attract people to high streets and provide places where communities come together in ‘third places’. Yet many face an uncomfortable combination of rising costs, tax pressures, squeezed margins and property arrangements that can make keeping the doors open increasingly difficult.
Our recent paper, Last Orders? Pub Closures, Policy and the Future of the Public House in the UK, authored with Dieter Kogler, argues that the crisis cannot simply be explained by changing consumer tastes or an inevitable, long-term decline in pub-going. The sector has faced a post-pandemic perfect storm, with public policy, business costs, pub-company financial arrangements and the competing value of pub properties all helping to shape its prospects. The central contradiction is clear: politicians celebrate pubs as the heart of their communities while the economic environment can make it increasingly difficult for them to survive.
The Chancellor’s Budget is an opportunity to address that contradiction.
Firstly, fix business rates properly.
Business rates should be at the top of Healey’s list. The 2026 revaluation left many pubs facing substantial increases in their rateable values, while the ending of pandemic-era relief added to the pressure. The government has responded with additional relief, including a 15% reduction for pubs in 2026/27 and a further 20% reduction announced by Burnham for 2027/28. The latter is expected to save a typical pub around £1,100 next year.
That is welcome, but temporary discounts are not a substitute for a system that works. A pub’s rateable value is not its profit. High turnover does not necessarily mean healthy margins when wages, energy, stock, rent, insurance and maintenance must all be paid. The government has recognised concerns about how pubs are valued and announced a review, but publicans need confidence that the outcome will address the underlying problem.
Healey should use the Budget to commit to a durable, transparent system of business rates for pubs, with valuations that better reflect the realities of the sector. He should also provide a clear timetable for reform and avoid a cycle in which businesses must repeatedly lobby for emergency relief whenever their bills rise.
Secondly, give pubs a fairer tax deal.
Pubs compete against supermarkets and off-licences that can sell alcohol at prices a hospitality business cannot match. A pub offers service, premises, employment and a social experience, but its cost base is fundamentally different from that of a retailer selling alcohol for consumption at home.
The Chancellor should examine whether the tax treatment of draught beer can do more to support pubs, building on the existing draught-duty relief. Any change must be consistent with public-health objectives and should not be a blanket subsidy for alcohol consumption. The case is for a more intelligent system that recognises the difference between drinking in a pub and buying cheap alcohol for home consumption.
Healey should also assess the case for targeted VAT relief for pubs and hospitality businesses. A reduction would not automatically be passed on to customers, and it would not solve every problem. But properly designed and evaluated support could help viable businesses invest, retain staff and manage cash flow. The government should examine the evidence rather than assume the current tax burden is beyond debate.
Thirdly, confront the problems in the pub business model.
Our Last Orders? paper highlights the importance of looking beyond taxation to the ownership and financial structures of the industry. Some publicans operate under agreements with corporate pub-owning companies (PubCos) that can involve substantial rents, tied purchasing arrangements and limited flexibility over costs. These arrangements differ, and not every pub company operates in the same way. Nevertheless, the balance of risk between property owners and pub operators deserves serious scrutiny.
A publican can work exceptionally hard, attract customers and build a successful local business yet still struggle if too much of the revenue is absorbed by rent, purchasing costs and other contractual obligations. The government should strengthen transparency around pub tenancy agreements, ensure access to effective dispute resolution and assess whether existing protections give tenants a fair chance of earning a sustainable living.
There is also a wider property problem, which we call the ‘prime land’ paradox. A pub building may be worth more for housing or another commercial use than it is as a working pub. This creates a financial incentive to close premises even when they remain important to the local community. Planning protections and assets-of-community-value provisions can help, but communities need practical access to finance and time to purchase threatened pubs before they disappear.
The Budget should support community ownership and viable pub transfers, particularly where a pub provides an essential local service and has a credible business plan. Community ownership and micropubs can offer more resilient alternatives in some circumstances, although neither is a universal solution. The objective should be to give viable pubs a chance, not to preserve every business regardless of its prospects.
Fourthly, invest in pubs as part of local economic development.
A pub does not exist in isolation. It can support nearby shops, restaurants, cultural venues, tourism and local suppliers. Its closure may reduce footfall and accelerate the decline of a high street or village centre. This wider economic contribution is rarely captured in the pub’s accounts, but it matters to the communities that lose one.
The Chancellor should connect pub policy to a broader high-street and regional development strategy. Targeted grants or low-cost finance could help viable pubs invest in energy efficiency, accessibility, kitchens, live entertainment and other activities that diversify their income. Support should be conditional on credible plans to improve long-term viability, rather than simply subsidising businesses with no realistic route to sustainability.
The government should also recognise the diversity of the sector. A traditional wet-led pub, a food-led establishment, a rural community pub and a micropub face different challenges. Policy designed around an assumed average pub risks missing the particular pressures affecting different business models and places.
Finally, measure success by whether pubs survive.
The government should publish regular data on pub openings and closures, employment, investment and the geographical distribution of support. It should evaluate whether tax relief and grants improve business survival, encourage investment and protect jobs, while being honest about the limits of what government can achieve. Not every pub can be saved, and changing consumer preferences will continue to matter. But policy should not accelerate closures that could be avoided through sensible reform.
Burnham and Healey deserve credit for recognising that pubs matter and for announcing additional business-rates support. Their pub visit was a useful reminder of the social role these establishments play. But the real test will not be which snack wins a blind ranking. It will be whether publicans can pay their bills, invest in their businesses and earn a reasonable return.
Our Last Orders? paper argues that pub decline is not simply an inevitable cultural shift. It is also a question of economics and policy. The Chancellor should use the Budget to reform business rates, consider a fairer tax treatment of pubs, improve the balance between pub owners and tenants, and help viable establishments invest and remain part of their communities.
Otherwise, the government’s affection for the British pub will remain a performance rather than a policy. And in communities across the country, the last orders bell will keep ringing.
Professor David Bailey works at the Birmingham Business School and is a Senior Fellow at the UK in a Changing Europe Programme.
Professor Philip Tomlinson works at the University Bath Management School and is Co-Director of the Centre for Governance, Regions and Industrial Strategy.
Print version here
John Clancy and David Bailey
Prime Minister Andy Burnham and Chancellor John Healey recently sat down in a pub, enjoyed a beer and debated the merits of pork scratchings, scampi fries and crisps. It made for an entertaining social media video. But if the government is serious about protecting Britain’s pubs, the Chancellor needs to do more than demonstrate his knowledge of bar snacks. He needs to change the economics of running a pub.
The stakes are high. Pubs are businesses, employers and an important part of Britain’s social infrastructure. They sustain local jobs, support breweries and food suppliers, attract people to high streets and provide places where communities come together in ‘third places’. Yet many face an uncomfortable combination of rising costs, tax pressures, squeezed margins and property arrangements that can make keeping the doors open increasingly difficult.
Our recent paper, Last Orders? Pub Closures, Policy and the Future of the Public House in the UK, authored with Dieter Kogler, argues that the crisis cannot simply be explained by changing consumer tastes or an inevitable, long-term decline in pub-going. The sector has faced a post-pandemic perfect storm, with public policy, business costs, pub-company financial arrangements and the competing value of pub properties all helping to shape its prospects. The central contradiction is clear: politicians celebrate pubs as the heart of their communities while the economic environment can make it increasingly difficult for them to survive.
The Chancellor’s Budget is an opportunity to address that contradiction.
Firstly, fix business rates properly.
Business rates should be at the top of Healey’s list. The 2026 revaluation left many pubs facing substantial increases in their rateable values, while the ending of pandemic-era relief added to the pressure. The government has responded with additional relief, including a 15% reduction for pubs in 2026/27 and a further 20% reduction announced by Burnham for 2027/28. The latter is expected to save a typical pub around £1,100 next year.
That is welcome, but temporary discounts are not a substitute for a system that works. A pub’s rateable value is not its profit. High turnover does not necessarily mean healthy margins when wages, energy, stock, rent, insurance and maintenance must all be paid. The government has recognised concerns about how pubs are valued and announced a review, but publicans need confidence that the outcome will address the underlying problem.
Healey should use the Budget to commit to a durable, transparent system of business rates for pubs, with valuations that better reflect the realities of the sector. He should also provide a clear timetable for reform and avoid a cycle in which businesses must repeatedly lobby for emergency relief whenever their bills rise.
Secondly, give pubs a fairer tax deal.
Pubs compete against supermarkets and off-licences that can sell alcohol at prices a hospitality business cannot match. A pub offers service, premises, employment and a social experience, but its cost base is fundamentally different from that of a retailer selling alcohol for consumption at home.
The Chancellor should examine whether the tax treatment of draught beer can do more to support pubs, building on the existing draught-duty relief. Any change must be consistent with public-health objectives and should not be a blanket subsidy for alcohol consumption. The case is for a more intelligent system that recognises the difference between drinking in a pub and buying cheap alcohol for home consumption.
Healey should also assess the case for targeted VAT relief for pubs and hospitality businesses. A reduction would not automatically be passed on to customers, and it would not solve every problem. But properly designed and evaluated support could help viable businesses invest, retain staff and manage cash flow. The government should examine the evidence rather than assume the current tax burden is beyond debate.
Thirdly, confront the problems in the pub business model.
Our Last Orders? paper highlights the importance of looking beyond taxation to the ownership and financial structures of the industry. Some publicans operate under agreements with corporate pub-owning companies (PubCos) that can involve substantial rents, tied purchasing arrangements and limited flexibility over costs. These arrangements differ, and not every pub company operates in the same way. Nevertheless, the balance of risk between property owners and pub operators deserves serious scrutiny.
A publican can work exceptionally hard, attract customers and build a successful local business yet still struggle if too much of the revenue is absorbed by rent, purchasing costs and other contractual obligations. The government should strengthen transparency around pub tenancy agreements, ensure access to effective dispute resolution and assess whether existing protections give tenants a fair chance of earning a sustainable living.
There is also a wider property problem, which we call the ‘prime land’ paradox. A pub building may be worth more for housing or another commercial use than it is as a working pub. This creates a financial incentive to close premises even when they remain important to the local community. Planning protections and assets-of-community-value provisions can help, but communities need practical access to finance and time to purchase threatened pubs before they disappear.
The Budget should support community ownership and viable pub transfers, particularly where a pub provides an essential local service and has a credible business plan. Community ownership and micropubs can offer more resilient alternatives in some circumstances, although neither is a universal solution. The objective should be to give viable pubs a chance, not to preserve every business regardless of its prospects.
Fourthly, invest in pubs as part of local economic development.
A pub does not exist in isolation. It can support nearby shops, restaurants, cultural venues, tourism and local suppliers. Its closure may reduce footfall and accelerate the decline of a high street or village centre. This wider economic contribution is rarely captured in the pub’s accounts, but it matters to the communities that lose one.
The Chancellor should connect pub policy to a broader high-street and regional development strategy. Targeted grants or low-cost finance could help viable pubs invest in energy efficiency, accessibility, kitchens, live entertainment and other activities that diversify their income. Support should be conditional on credible plans to improve long-term viability, rather than simply subsidising businesses with no realistic route to sustainability.
The government should also recognise the diversity of the sector. A traditional wet-led pub, a food-led establishment, a rural community pub and a micropub face different challenges. Policy designed around an assumed average pub risks missing the particular pressures affecting different business models and places.
Finally, measure success by whether pubs survive.
The government should publish regular data on pub openings and closures, employment, investment and the geographical distribution of support. It should evaluate whether tax relief and grants improve business survival, encourage investment and protect jobs, while being honest about the limits of what government can achieve. Not every pub can be saved, and changing consumer preferences will continue to matter. But policy should not accelerate closures that could be avoided through sensible reform.
Burnham and Healey deserve credit for recognising that pubs matter and for announcing additional business-rates support. Their pub visit was a useful reminder of the social role these establishments play. But the real test will not be which snack wins a blind ranking. It will be whether publicans can pay their bills, invest in their businesses and earn a reasonable return.
Our Last Orders? paper argues that pub decline is not simply an inevitable cultural shift. It is also a question of economics and policy. The Chancellor should use the Budget to reform business rates, consider a fairer tax treatment of pubs, improve the balance between pub owners and tenants, and help viable establishments invest and remain part of their communities.
Otherwise, the government’s affection for the British pub will remain a performance rather than a policy. And in communities across the country, the last orders bell will keep ringing.
Professor David Bailey works at the Birmingham Business School and is a Senior Fellow at the UK in a Changing Europe Programme.
Professor Philip Tomlinson works at the University Bath Management School and is Co-Director of the Centre for Governance, Regions and Industrial Strategy.
Print version here John Clancy and David Bailey