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[title]‘I’ve got visions of pubs this winter being candle lit, with a roaring fire,’ says pubs campaigner James Watson. Sounds lovely, doesn’t it? Dickensian, even. But the lo-fi makeover Watson foresees isn’t an aesthetic choice, it’s a response to the soaring energy bills that London pubs currently face.
In September, celebrity chef and gastropub owner Tom Kerridge went public with a startling stat: his bills were set to jump from £5,000 a month to an astronomical £35,000 a month. ‘The reality is that many, many places will be forced to close,’ he said at the time, ‘whether they’re Michelin-starred restaurants or small pubs where the landlord lives upstairs.’
Since then, short-lived former PM Liz Truss’s mini-budget offered some relief by introducing a price cap on energy bills for businesses. But it’s no silver bullet. ‘Hospitality businesses will still absolutely struggle to cope,’ says Kerridge. ‘Even though the price cap has been brought in, it still means people’s [bills] could double if not treble. This, alongside consumer confidence and spending being lower, all adds to pressures being put on hospitality.’
Already, previously successful pubs including the Michelin-starred Fontmell in Dorset and the award-winning Baskerville in Oxfordshire have shut their doors for good after being hit with gigantic energy bill hikes. Much-loved Hackney pub The Kenton has decided to scrap its popular Sunday offering: ‘We are not serving roasts this winter due to the enormous energy costs,’ says its website.
Even Wetherspoon’s is struggling, putting nine pubs up for sale. Brewdog also hit the headlines recently, with its decision to close three pubs: ‘I think it’s 90 percent energy bill related, but there’s a little bit of the devil in them as well,’ speculates Watson. ‘I could see them doing it partly to make a political statement, to get some attention on the issue.’
Attention is exactly what pubs need right now. But so far, everyone’s eyes have been elsewhere, thanks to the media tumult surrounding the Queen’s death and the ongoing chaos in 10 Downing Street. And now, current chancellor Jeremy Hunt’s recent cuts to Truss’s mini-budget suggest that hospitality is anything but a priority.
A shot in the arm?
Last month, Truss and Kwasi Kwarteng’s substantial package of economic measures offered a welcome boost for hospitality. But now Hunt has taken a scalpel to their plans. He’s scrapped her proposed freeze on alcohol duty, which was due to come into force in February 2023. And he’s also reduced the scope of the energy-bill price cap: it was originally going to run for two years, but now it will end in March. ‘Everybody’s very frightened and really nervous about what’s around the corner,’ says Watson.
I spoke to several London pub landlords who were reluctant to come out and say they were struggling, for fear of spooking their creditors or suppliers. Pubs have high fixed costs and relatively low profit margins, which means that their finances were precarious even before the pandemic. Now many have also got to pay back the government loans that helped them survive lockdown, and the timing couldn’t be worse.
‘In terms of impact, this is almost like another pandemic,’ says Herman Haye, landlord of central London pub (and beloved Time Out local) The Sun, as we sip drinks in its quiet upstairs room. ‘Pubs made it through Covid with government support, but this time, there’s not a lot of help.’ So what should people do to keep their local afloat? ‘Just drink more!’ says Haye, jokingly. ‘Support your local pub, and find out what they need to stay open. If they’re campaigning for tax relief, join in.’
But the downside of supporting your fave boozer this winter will be paying more. ‘You could be looking at a £10 pint this autumn,’ says Haye. And food’s likely to be pricier, too. ‘Price rises will have to happen, that’s inevitable,’ says Kerridge. ‘You’ll have noticed that your supermarket shop costs more, and similarly, everything that comes into our kitchen is more expensive.’
This could be crunch time for London pubs: forced to up their prices, just as their customers start feeling the pinch. ‘As people start to feel the cost of living crisis hit their pockets,’ says Kerridge, ‘the first thing that gets hit is hospitality.’
The developing threat
As pubs start to really struggle, property developers will be watching with hawk-like rapacity. The 2017 Neighbourhood Planning Act means that developers have to seek planning permission before converting a pub into more lucrative housing. But as pressure rises on London’s real estate, developers are finding creative (or downright sneaky) ways to turn pubs into residential properties.
Everybody’s very frightened and nervous about what’s around the corner
Watson reckons that the current rises in energy bills will embolden developers, and outlines what he calls the ‘Trojan Horse Method’: ‘When they buy up a pub, first they’ll turn the upstairs into flats, then they’ll build on the beer garden, then they’ll put the rent up on the pub itself so that no one will want to run it. Then they’ll go to the council and say, “Can we turn this final piece of the premises into another flat, because it’s clearly not viable as a pub?” I’ve seen council planners fall for that trick time and time again.’
Another existential threat to local pubs comes from their not-so-friendly neighbours, especially in rapidly gentrifying areas. Islington pub The Compton Arms was recently put under threat by a licensing review after noise complaints. Its landlord was reluctant to speak out. But Watson has short shrift. ‘I have very little sympathy with people who complain,’ says Watson. ‘They’re normally fairly affluent middle-class people who move into the area with a strange sense of entitlement to peace and quiet. It’s not as though they woke up one morning and suddenly someone’s built a pub. A lot of Victorian street-corner pubs have been there since the 1860s.’
Admittedly, a lot has changed since London pubs’ high Victorian heyday. Lunchtime drinking and afterwork pints were once the norm. Now, today’s more puritanical working culture has meant that for a lot of people, trips to the pub are a weekend treat rather than a daily staple – and that means many pubs are under pressure to stay open later, to maximise takings.
There’s more change on the way, too. More and more Londoners are resistant to the lure of a crisp pint, whether it’s for religious reasons or because they can’t face the thought of a three-day hangover. A 2020 report by the Society of Independent Brewers (Siba) found that 23 percent of 16- to 24-year-olds don’t drink alcohol at all. London’s filling up with booze-free hangout spots like coffee shops, bubble-tea cafés and dessert bars, all vying for the booming dry demographic. Can pubs compete? ‘I’m seeing an increasing number of pubs that have coffee machines, to appeal to a broader range of people,’ says Watson.
But pubs need to serve up more than a perfect macchiato to secure their futures. During the pandemic, many boozers got creative, making themselves available as food distribution hubs or remote working centres. Their role could keep on expanding during this winter’s cost-of-living crisis, where campaigners including Martin Lewis are calling for ‘warm banks’ where people who can’t afford to heat their homes can go. As Reverend Richard Coles wrote on Twitter, ‘We’re going to need public places that are heated and open to all to help people through this coming winter, so maybe the government could solve two problems by discounting energy bills for pubs to keep them open and people warm?’
This idea probably isn’t the answer to struggling London pubs’ prayers. But it does point to something crucial: in the public’s imagination, pubs are more than just another business. As Kerridge puts it, ‘Pubs help eradicate loneliness. They’re places where people connect and build relationships. They’re vitally important in holding the fabric of many communities together.’
The race is on
London’s pubs have clung to existence through centuries of change. It’ll take years, not months, to adjust to higher bills and evolving consumer habits. But right now, it looks like time’s running out.
Further government action is needed, and fast, reckons Watson. ‘If they cut VAT in pubs and restaurants to zero, the Treasury would lose a lot of money, but it would give a big boost to the industry,’ he says. ‘And a windfall tax on energy profits could be used to reduce hospitality energy bills.’
Otherwise, the only pubs that will survive are the chains, with deep pockets and the buying power to keep serving up affordable pints as the cost-of-living crisis bites. ‘That’s what’s going to be killing your local pub: Wetherspoon’s,’ says Haye. ‘You can’t compete with their prices, especially as an independent. I hate the thought of it. But it’s all we could have left if something doesn’t happen.’
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