Rishi Sunak has to step in and help struggling pubs to avoid mental health epidemic

As NationalWorld reported on Friday (5 May), they are in the midst of a crisis owing to sky-high energy bills and consumers spending less. Although the pub sector was hoping for a big windfall from the Coronation weekend, publicans told us any sales boost would not be enough on its own to save them.

The situation has come to a head as the government made its Energy Bill Relief Scheme (the business version of the Energy Price Guarantee) much less generous for most industries in April. It has left many pubs with energy costs that are well above current market rates given they had to enter fixed contracts to take advantage of the scheme, which was launched by Liz Truss in September 2022.

Even before the scheme ended, pubs were closing at a rapid rate. Research by trade body the British Beer and Pub Association (BBPA) found there had been 153 permanent closures between January and March 2023 - a rate of nearly 12 shutterings a week. It seems probable that this rate has only increased since April.

The disappearance of every single one of these pubs represented a major blow to the town or village they were based in. For, not only are they businesses, they are also community centres. This was underlined in a conversation I had with one pub landlord last week, who told me his establishment was “at a crossroads” given the current cost pressures he faces.

“Our customers are mostly male, retired and live alone. They come here to talk to other people,” Mark Bates, the owner operator of the Three B’s Micropub in Bridlington, East Yorkshire, said. “It’s their social release to come to the pub. They only know each other because of the pub. To not have that would be a backward step for their mental health.”

While alcohol can of course cause bad health issues, the Covid pandemic and the UK’s cost of living crisis have created a serious national mental health epidemic that is costing the government billions of pounds a year and is stretching the NHS. We need more community spaces, like pubs, to counter this problem. A nation that talks to each other can only be a happier place to live in.

It would be too politically awkward for the government to row back on its winding down of its energy bills support, especially in light of the Conservative Party’s disastrous local election results from last week. But a positive move it could make would be to cut VAT for the hospitality industry. If it can target this support at independent businesses, then all the better.

Rishi Sunak has done it before. As Boris Johnson’s Chancellor, he cut the rate from 20% to 5% to tide the sector through the pandemic.

A temporary cut would allow businesses to keep prices low, which should bring them more customers. If it’s targeted at independents, the cost to the Treasury (which is expected to generate £162.2 billion from VAT over the 2023/24 financial year) would be minimal. It could also potentially create even more revenue for the public purse if more people head to their local for a pint or a meal.

But most importantly of all, it would keep in place the cohesive glue that binds our communities together. After all, if there’s anything Covid has taught us, it’s that we’re better off when we’re together.