The Maiden Over

A number of constituents have contacted me about possible closure of the Maiden Over pub. I have been talking to councillors about what can be done in this situation:

“I have taken an interest in the closure of pubs and the decline of the pub trade along with other MPs. Part of the problem is a change in drinking habits. Many more people now wish to drink at home or with friends, buying alcohol from supermarkets to do this. This has led to a long term decline in alcoholic beverage sales on licensed premises.

The government has responded to worries expressed by some publicans in tied houses about the terms of their contracts and the behaviour of the owning companies that lease the premises to them, as some have claimed the terms or enforcement of their leases impedes running a profitable business.

As a result the government has decided to set up a Statutory Code of Conduct regulating the tied trade, with an Adjudicator to deal with disputes between publicans and pub owners. This was announced following consultation on 3 June 2014, and the necessary clauses included in the Small Business, Enterprise and Employment Bill (Section 4) presented to the House on June 25th. This does not of course help with disputes between landlords and pub owners prior to the new law, which will continue to be covered by the existing laws of contract and fair trading.

The more relevant national legislation for the Maiden Over case is the 1995 Town and Country Planning General Permitted Development Order 1995. The then Conservative government wished to increase the flexibility for High Streets and other locations for people to switch a property from one use to another. The idea behind the Order is you can switch uses within one of the General Uses classes in the Order without needing a fresh planning permission.

Class A includes both pubs and shops, so it is usually possible to convert a pub into a shop  or restaurant without needing planning permission. This is a generally desirable freedom, especially given the decline of some High Streets and the need for innovation to keep them alive. However, we recognised at the time that issues like pub closures could create special hard cases. We therefore included in the Order the provision allowing a Council to make an Article 4 Direction where there is a need to “protect local amenity or the wellbeing of an area”. Labour left this legislation unamended during its period in office.

On 7 January 2013 when the issue of pub closures was raised in the Commons Mr Boles as Planning Minister said that Article 4 Directions could be used by Councils to require a planning application and a Council decision where someone wants to convert a pub to a shop. He also drew attention to the fact that the pub needs to be a potentially viable business.

I am happy with the cross party decision to leave these local matters to the local Council Planning Authority. CAMRA have run campaigns around the country to save particular pubs and to invoke Article 4. Wokingham Council should examine the position of the Maiden Over carefully.

If they conclude someone could run a profitable pub business there because there is enough potential trade, and conclude that the pub is an important part of the local amenity, then they can use Article 4 if they wish. It is always wise for a public body to consult its lawyers when thinking of doing so. My email is by way of general guidance but I am not a qualified lawyer offering legal advice.”

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4 Comments

  1. adams
    Posted August 1, 2014 at 5:17 pm | Permalink

    According to the Taxpayers alliance one pint in every three is just for the Tax collector .
    Do you think this has anything to do with it John ? Cost and the smoking ban are definitely major reasons why Pubs can no longer make a decent living .

  2. Posted August 2, 2014 at 8:56 am | Permalink

    Dear John,

    Thank you for taking the time to write this useful blog for your constituents and others. I agree with much of what you say. People’s drink habits have indeed changed. But then such things continually evolve. Whilst it may be cheaper to buy beer and wine at supermarkets, this fails to recognise the important social community facility that pubs provide. Supermarkets do not attempt to, and could never, match this. Furthermore, that unique British product that is cask ale, can only really be enjoyed in the pub. Supermarkets enjoy only 5% (or less) VAT on their sales whilst pubs pay a full 20%. Moreover, money spent in the local pub remains in the local economy whereas money spent in a supermarket is siphoned out of the local economy to shareholders and supply chains often overseas. What does the government intend to do about this basic unfairness?

    You will be aware that pubs are a local economic stimulant. Crucially they provide flexible employment for (typically) 18-24 year-olds which are the jobs in short supply in our economy right now. In addition to the typical 5 local jobs that a pub will provide, there are a further 11 in the supply chain such as breweries, farmers, butchers, logistics etc. The average pub injects an additional £80,000 into the local economy through the hive of social interaction that takes place around it. I refer you to the study “Pubs and Places” by the Institute for Public Policy Research.

    In spite of evolving consumer habits, good pubs which have adapted to the needs of their communities, find themselves as busy as ever. Notwithstanding many highly successful wet-led pubs, a typical pub nowadays serving wholesome food and drink, with a well-appointed interior and spotlessly clean lavatories (particularly the ladies, which are of tremendous importance) will thrive. It is no co-incidence that the ones doing particularly well are those free of tie. They are able to offer a range of cask and craft beers, good quality wines and spirits, and any profit generated is invested back into the business, or indeed to fund other pubs. This differs greatly from the flawed business model of the pub companies, which are living on borrowed time. The obscene rents and additional charges (wet rent) taken from hardworking publicans is used to chip away at their mounting debts.

    On the planning discussion, you are incorrect about the flexibility of the A use class. Whilst it is possible for a pub (A4) to be turned into a cafe or a shop (A3 or A1), the change of use of a shop (A1) to a pub (A4) would be subject to planning consent. One can go down the use classes via permitted development but one requires planning consent to go up the classes. By the same token, a pub could not change into a hot food takeaway (A5) without consent. Article 4 Directions on pubs are rare indeed. Out of some 47000 pubs in the UK, I am aware of only ten confirmed A4Ds. Sadly this is a less-than-perfect local (half-baked) solution to a national problem. We lose 28 pubs each week nationwide. Through the encouragement of A4Ds, central government is transferring risk and responsibility to local government. In addition, the proposed planning reform announced last week seeks to make them even more difficult and costly. For the sake of a simple tweak to the GPDO, LPA would not need to make A4Ds. All we ask is that any demolition or change of use of a pub is brought under planning control. There is nothing unreasonable in that.

    The hospitality business is remarkably resilient and innovative. Look at the vast improvement in quality and choice of wholesome pub food that we have seen over the last decade and the widespread availability of high quality beer. In spite of supermarkets selling beer at a loss leader and the (relatively) high duties and taxes paid in pubs, people still flock to use them and support them because they offer something deeply satisfying. They offer a social interaction and social fulfilment that is unparalleled by any other facility. The bar counter of the English pub is one of the very few places that it is socially acceptable to strike up a conversation with a total stranger – in fact it is encouraged!!

    There are two big killers of pubs, which I am pleased to say you recognise in your piece above:

    1. The Great British Pubco Scam
    2. The weak planning system

    The legislation going through parliament to address 1. does not go far enough. Whilst we welcome action in this area, we wish to see a truly “fair deal” for our locals. This must involve an optional market rent only agreement. Furthermore the ability for a pub to operate free of tie is essential to ensure a level playing field. The member for Leeds North West will be tabling amendments which I would urge you to support. He is an expert in these matters and something of a “pub champion”. Whilst we welcome the long-overdue introduction of the small business (etc) bill, without market rent only and free of tie, it will once again let down our hardworking publicans. Reform of these unfair business practices is long overdue.

    In the planning arena, DCLG launched a technical consultation last week on planning reform. In it they propose to amend use class A2 to give communities more power to resist betting shops and payday loan shops. Disappointingly the document falls short of giving similar power to communities to protect their precious pubs. This is something we will fight to have included and we would be grateful of cross-party support. The government has recognised that nationally, there are has been an explosion in the number of betting shops and payday loan shops and they are granting Council’s power to control these numbers. This is hugely welcome. By the same token, we are losing 28 pubs every week and Councils need the power to stem this dreadful attrition. For the reasons I outline above, A4Ds are impractical.

    Both of these killers could be easily resolved through amendments to the Small Business (etc) Bill and through a further simple tweak to the GPDO. These changes are long overdue as the UK has lost around 25% of its pubs over the last 30 years. In my own area of East London, the attrition rate is 52%. London currently loses 100 pubs every year. Out pubs are under severe threat. They are entirely viable and profitable businesses when well managed and our a vital part of our social and cultural heritage.

    I am delighted to see pubs on the agenda of yet another MP. We welcome your support but only you and your colleagues have the power to take positive action to redress this situation.

    Yours Sincerely,

    James Watson
    CAMRA Greater London Region

    Reply Thank you for setting out your case. You do not concentrate on the main issue, which is whether or not there is a viable potential business for a pub which has traded unsuccessfully in the past and where its owner and tenant agree it should close. I do not agree that shifting the Article 4 intervention from local to national government would be a game changer, nor would making every pub change subject to planning permission arrest the closure of failing pubs where no-one could run a profitable business. The wider issues of the tie are being tackled by regulation. It may well be that free houses do better on average, which argues for more people to negotiate or buy free houses instead of signing up to existing tie agreements. Legislators will do what we can to help, but the underlying business issue is how to run a profitable pub given changes in consumer preferences, which you set out to some extent in your interesting comment.
    Alcoholic drink attracts 20% VAT whoever sells it, and the impact of that spending on other jobs and overseas cashflow is similar whether sold in a pub or a shop.

  3. BobE
    Posted August 2, 2014 at 11:07 am | Permalink

    John, If you drink at home it is much cheaper and you can smoke. The only pubs near to me that are surviving have become restaurants. Maybe city pubs are more viable. I can buy a bottle of the same wine that a glass costs, if bought in one of my pubs.

  4. Gerry Bond
    Posted August 20, 2014 at 12:50 am | Permalink

    In Belgium I have witnessed massive amounts of alcohol being purchased from supermarket cash-and-carry by people I knew. People I knew, who ran highly successful bars. Drinking at home was unnecessary, and rare. Everyone in my area met outside the home. Why does the UK have to live in this mad culture-warp that everyone hates so much?

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
    Published and promoted by Thomas Puddy for John Redwood, both of 30 Rose Street Wokingham RG40 1XU
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