Thursday, 28 February 2013

The Golden Goose ...

Firstly a huge thanks to Tandleman, for putting up a link to the Wirtschaftsfaktor Bier ... or the English title of this mighty report from the Brewers of Europe - The Contribution made by Beer to the European Economy.

With reports from the various brewers' associations from the EU27 in 2010 this compendium of research shows not just how important the brewing industry is to the European economy but through its dedicated pages to member states we can get a snapshot of just how important the brewing industry is to the British economy. (By the way, the report for the UK starts at page 252). 

The report concentrates on brewing and the economies (sic) for the period 2008 - 2010, which, as it must take an incredible amount of collation and research I think we can assume are the most current figures available ... what has happened since 2010 will be a matter of conjecture, but if the trends in reduced brewing volumes and per capita consumption of recent years the following extracts can be viewed as conservative at the very least.

Trawling through this almanac of statistical analysis there are a couple of interesting figures that you may wish to share with your MP before the next debate on scrapping the beer duty escalator (next Tuesday, March 5th) or the impending budget.

To save you time with an abacus this means that in the two years from 2008 the total number of jobs in the UK "due to beer" fell by some 57,000.

Using today's exchange rate of 0.87 euros to the pound, this means that in the same two years the total "value added" to the UK economy by beer fell by £2,193,000,000 ... yep that's over £2billion pounds !

So each job in brewing generates 44,807 euros or  £38,982 in taxes and duty ... this alone amounts to some £2,221,979,130 in lost revenue to the Exchequer.

I know your brain must be aching by now, but I promise you this is the last graph from the report...

This 8.6 billion euro or £7.482 billion added value means that in total brewing alone contributed some 15.321 billion euros or £13.330 billions to the UK economy in 2010.

If the trend in fall of inputs to the economy in 2008-2010 of around 17% was extrapolated for the period 2010-2012 this would mean another £2.266 will have been lost.

So over a period of four years one can make an educated guess that getting on for £4.5 billion has been wiped off the books.

I have only one question to ask ...  
"Can it be entirely coincidental that this loss to the economy occurs during the period of the beer duty escalator?"

The estimated loss to the exchequer by scrapping the duty escalator would be some £100 million per annum over the remaining period of the original term for the escalator (due to end in 2014/15) ... so let's say £200 million before the next general election.

If current trends continue and another £2 billion is lost to the UK economy over the next two years (let alone the knock on effect of another 57,000 job losses) doesn't it seem a little crazy to keep the escalator?

P.S. using just the 2009 figures The Sun estimates that over 29,000 jobs for the unemployed young (18-24) have been lost ... another factoid for the Chancellor

Monday, 25 February 2013

Early Day Motion 703 - Tuesday March 5th

 Here's the wording for Early Day Motion 703 ...


"That this House notes theresolution of 1 November 2012 on the beer duty escalator welcoming the essential contribution of brewing and pubs to the UK's economy in providing one million jobs, noting the 42 per cent increase in beer duty since 2008 and HM Treasury forecasts that have shown that there will be no additional revenue generated from beer duty despite planned increases over the next two years, expressing concern about the effectiveness of this policy in tackling the Budget deficit, its impact on valued community pubs and the continued affordability of beer in pubs and urging the Government to support the UK's beer and pub sector by conducting a thorough review of the economic and social impact of the beer duty escalator to report back before the 2013 Budget."

Share this video with your MP ...

Monday, 18 February 2013

Who's the daddy ?

... nuff said eh?

I spoke too soon ...

A few days ago I posted a copy of a letter from Brakes reassuring its customers that their processed meat was contaminant free ... today the Publicans' Morning Advertiser reports that although 71 items tested were dobbin-free it supplied Whitbread's frozen lasagne that has also been reported as containing a bit of Trigger ... the curse of Publican Sam strikes again ...

I've said it before and I'll say it again ... buy local & make your own ...

Friday, 15 February 2013

Coming to a high street soon?

With news in from the Independent that less than 10% of the £1.2million set aside by government for the Portas project to bring some of Britain's high streets back to life and the never ending revelations about tax dodging by big businesses across the board I've come up with a way to do what Portas wants (stop the deracination of our town centres) and the rest of us want (for all taxpayers, whether corporate of personal to pay their fair share of tax) ... it's relatively simple ... a business rate surcharge directly linked to the proportion of on-line sales for retailers and service providers.

It would work in a similar way to the highly discriminatory method currently used to determine the way pubs are rated by Fair Maintainable Trade and notional market rents (determined by the pubcos etc in cahoots with the Valuation Office) ... and its called The Community Retailing Quotient (CRQ).

CRQ is a surcharge on business rates valuations linked to the proportion of turnover a retailer derives from online sales emanating from their premises. The CRQ system would give relief from the surcharge to the same value as each local authority's median business rates valuation, at which point the surcharge as a percentage of trade which is attributed to online sales for any transaction originating in the UK for the business operator is levied on top of their standard business rates valuation. (By the way this would also work for all the utility companies etc who avoid their tax obligations and have spent a decade or more persuading us all to go online to order and pay for their services.)

As there are regional variations in the density of premises used by online retailers etc, funds collected from the CRQ would be remitted by local authorities to central government to offset the budget cut requirements of the Treasury enforced on local authorities. Broadly cost neutral for the exchequer, less minimal administration costs, plus savings for HMRC from not having to pursue global companies for their fair share of other taxes, such as VAT and corporation tax.

Of course, there are businesses that already contribute to their local economies by having high street premises and also retail online; those specific premises would be exempt from the CRQ surcharge as they are already "fair retailers".

Use of business premises by online retailers as local collection points for customer orders located in town/city centre retail areas could be offered an introductory business rates holiday, say, the first six months, equivalent to each local authority's median business rates valuation and exemption from the CRQ for those premises. Online retailers locating to city/town retail areas would have sufficient operating costs saving to promote their new community based business, say, from reduced distribution centre to household courier fees, this transportation cost being transferred to the consumer.

Having a "utilities hub" in each town centre where consumers could interact with real people when they need advice about tariffs, energy efficiency etc could be another way for some big businesses to mitigate its CRQ liability. Surely some of us can remember Gas Board, Water Board, Electricity Board, and BT shops where one could make payment, get advice etc? We could even have banks with real bank managers, not customer service representatives ... wouldn't that be novel!

By returning footfall to high streets online retailers/service providers can continue to trade online and pay a fair share of taxation and encourage customers to join them in their collection outlets ... needless to say these outlets, if presented as glorified Argos stores, wouldn't be popular with significant numbers of consumers ... so collection outlets could incorporate cafes, bars and casual dining operations, no doubt equipped with free wi-fi or hard-wired sales terminals to order whilst in-store. Can you imagine the achingly hip and cool new incarnations of shops if Google and Ebay offices are anything to go by?

(Not to interrupt the flow of your reading but this just published in Marketing Week about Google's plans for retail outlets 19/2/13)

Local communities benefit from the renaissance of our high streets, essential local services could be protected; jobs could be created where they are needed, in local communities, (albeit at the cost of more "cloning") and online retailers/service providers gain an additional income stream and renewed customer confidence and trust in their brands.

Of course, this will never happen, as while it would be broadly cost neutral for the Treasury, it would cost big business billions in increased tax and other costs ... and their owners/shareholders, bankers, accountants, lobbyists and our political "representatives" will never stand for that. Even if they did acquiesce there would still be a bar to this being adopted ... us.

We just love not having to stir our stumps and prefer all the things we consume to be delivered to our doors, be they real world or digital.

Thursday, 14 February 2013

February Newsletter ... out now

Just to let you know that this month's How To Run A Pub newsletter is now available online here

To get future editions delivered directly to your inbox ...

Tuesday, 5 February 2013

Pubs ... everybody's whipping boy ...

The Government “will shortly consult” on regulations for locally-set licensing fees with introduction expected in the summer, the Home Office has confirmed, as reported in the Publicans' Morning Advertiser today

Councillor Mehboob Khan, chair of the LGA’s Safer and Stronger Communities Board, said: 

“It’s clearly wrong that taxpayers are subsidising the drinks industry. Councils want to support good local pubs but cannot be expected to continue picking up the tab for licensing fees which are outdated and not fit for purpose."

“As well as meaning more taxpayers’ money could be spent on frontline services, a more flexible licensing system would help councils support responsible venues which enrich local communities and put pressure on those which encourage excess drinking, noise and high street mess."

Why is it always pubs, probably the most responsible and controlled environments for the consumption of alcohol pilloried by all and sundry? Where is his opprobrium for the off-trade, such as the big supermarkets, who flood the market with cheap booze and don't supervise its consumption? Take a stroll down most high streets and look at the mess that other premises licensed under the Licensing Act cause ... and I'll venture that pubs cause less mess than that generated by the plethora of late-night take-away premises ... it's certainly the case in my neighbourhood.

Here's a little more analysis:

166,000 licensed premises in UK, deficit over 6 years is £100millions so a one-off charge for the "under-payment" of costs per premises of £612. Then £102 extra per year for the next 5 years, review the situation and set new fees.

The quid pro quo? Business rate reform so that pubs are valued and rated in the same way as other retail businesses ... I know which most pubs would prefer.

Simplistic? Yes it is, but no more simplistic than the comments by Councillor Khan ... why are they limited to pubs, what about off-trade? What about the food and other premises covered by the Licensing Act? As others have pointed out what about a review of other fees local authorities have the right to impose?

It's fair enough to put right the mistake of the previous administration by setting fees too low ... or were they? Have councils just been incredibly inefficient in processing licensing applications etc? Allowing local authorities to set their own fees will reward those that are financially inefficient ... so yet another consultation process for the mandarins and politicians ... wonder how much the consultative process costs the country every year as well?


Front-Line Services?

And before I sign off on this topic ... Kirklees Council (Councillor Kahn is their leader, I believe) must be a bit strapped for cash, what with spending £25,000 making sure its 69 councillors all got equipped with i-Pads just in time for Christmas 2012 ... it's a shame that pubs will be targeted to pay for this kind of profligacy. I wonder are i-Pads for councillors part of a council's front-line service provision in the ivory-towers of Kirklees?

By the way, an ipad 2 cost £329 from the Apple Store, which, is probably the most expensive way to buy them ... so with an entire Local Authority's purchasing power at its disposal why did Kirklees pay £362 a piece? Could this be a portent of the efficient way that it and other members of the LGA will administer licensing?

Nurse! Meds! Now!