Via Witterings, an article in The Torygraph headed "Campaign to save the 'great British pub' backed by 200 MPs". (Witterings also links back to UKIP's original petition, which states the bleedin' obvious, that the best way to help pubs is to scrap the smoking ban, but let's put that to one side for now). Two of the MP's key demands are: "To axe plans to increase beer tax even further [and] To end the irresponsible promotion of alcohol in supermarkets, pubs and elsewhere".
Let's not forget that the Tories also launched a petition "to cut taxes on low alcohol drinks such as beer" and the Nulab fakecharity IPPR stated that two of "the main factors contributing to the rise in pub closures [include] Competition from shops and supermarkets where alcohol is much cheaper [and] Increases in tax on beer".
OK, let's assume that the total amount of alcohol consumed is a given; and that consumers are best-placed to decide where and how to consume it. It's a simple observation of fact that people are prepared to pay more for a pint in a pub than a pint from the supermarket, so what clinches the decision whether to drink in a pub or to buy from a supermarket and drink at home (apart from the fact you can still smoke at home) is the relative price difference.
-----------------------------
Right, now for the maths bit.
Beer tax is £16.15 "per hectolitre per cent of alcohol in the beer", i.e. the 'beer tax' on one pint is about 40p. The EU imposed Value Added Tax is 13% of the total selling price (or 15/115 of the total selling price). Remember that 'beer tax' is the same whether it's sold in a supermarket or in a pub, but VAT is a percentage of the total selling price!
So if a pint of beer in a supermarket costs 80 pence, and a pint in a pub costs £2.40 (i.e. three times as much), the total tax on the pint from the supermarket is 50p but the total tax on the pint in the pub is 70p. Ask yourself...
1) What would happen if they went the whole hog and scrapped the beer tax entirely in some vague attempt to help pubs, and both supermarkets and pubs passed on the full saving to the consumer* - then the pint in the supermarket would fall to 40p and the pint in the pub would fall to £2. All of a sudden, a pint in the pub would cost five times as much as a pint from the supermarket that you drink at home. Would this help pubs? Methinks not.
2) What would happen if they went the on the other tack and scrapped VAT but increased beer tax to 55p per pint (in the interests of some sort of fiscal neutrality), and both supermarkets and pubs passed on the full tax changes to the consumer* - then the pint in the supermarket would increase to 95p and the pint in the pub would fall to £2.25. All of a sudden, a pint in the pub would only cost two-and-a-third times as much as in the supermarket. Would this help pubs? Methinks it would.
Ergo, if 'they' really want to help pubs via the tax system (rather than just scrapping the smoking ban), it's not the beer tax they should be looking at, it's the bloody VAT, The Worst Tax of All.
* The price-demand curve for alcohol is inelastic, so this is one of the few cases where the consumer bears the bulk of a sales or turnover tax.
It Makes No Difference
1 hour ago
23 comments:
MW - thanks for the link! I knew my 'number cruncher' would hop onto this tax angle, presumably with no need for glasses either?
the smoking ban is here to stay. get over it.
@ roym...you hope.New government will hopefully dump the fake charities pum ping out missinformation.
Roym: If it is, Labour won't regain power for a generation or more. 9 million people (the majority of whom are 'working' people, formerly Labour's core vote) don't forget being marginalised and ignored, and it has opened many eyes as to how Labour lie and mnaipulate.
MW is correct to point out an undeniable fact - that the ban has seriously harmed pubs - while Labour refuse to even admit it has contributed to a single pub closure of the 3,000+ since 2007.
The triumph of dogma and idealism over pragmatism and fairness. The victory of using a majority to bully a minority. All the equality and diversity that Labour have been spouting for decades is a sham if they approve of belittling and denormalising a minority which doesn't 'fit' their delusional utopian vision.
In short, they are stupid, as is anyone else who can't see the damage it has caused. The selfish ones even say that despite the misery and carnage for publicans and associated tradesmen, it should be forgotten because they personally like it that way.
And, as MW says, Labour haven't even the merest understanding of how economic stimuli will effect consumption in target areas.
They are inept and have ripped the country apart through mismanagement and self-regard. (sadly, the Tories are tight-lipped about how they are going to pull us out of this authoritarian, spin-laden mess, if at all)
Yes, the lot of them are idiots and shouldn't, in any way, be encouraged. Fight the fuckers on all fronts or just give up your right to live life freely.
Roym: Don't you believe the smoking ban will never be amended. When in 2 years time we have lost another 4,000 pubs, 8,000 in all since the smoking ban out of 60,000the Tories will have no choice.
I was one of the delegates at the IPPR symposium on behalf of www.freedom2choose.info and presented the evidence that the smoking ban is the main reason for pub closures. One of the IPPR people was quite curt to me at my temerity. I have IPPR's survey results and one of the documents they cite is from Mintel.
"January 2008
Smoking Ban: British business feels the heat.
Just over six months on from the introduction of the smoking ban, latest research from MINTEL finds that the ban can claim some success amongst smokers. But the likes of British bingo and the good old drinking man's pub could now be seriously under threat...
MINTEL's exclusive consumer research shows that as far as the government’s plans to reduce smoking rates are concerned, the ban has things moving in the right direction..... But despite this, one in five (22%) smokers feel that the ban has disrupted their socialising and 16%, or some 2 million adults, say that they are now actually going out less."
You also have the AC Nielsen report which puts the smoking ban as 80% of the reason for pub closures.
More biased reporting to the Labour MPs who were present.
DaveA, thanks for fighting the commonsense corner at the IPPR. They did a report recently that covered the issue of 'tied pubs' most admirably but does not appear to have mentioned the smoking ban at all. I'll fisk that soon.
If its the ban, how do you explain scotland having MORE pubs now than befire the ban? The smoking ban is...ahem, a smokescreen! It is off licence/supermarket sales hitting pubs.
Neil. Simple really. They haven't.
Where do you get such crap? I'd love to see your source.
Neil in Scotland if a pub has a licence it stays on record as being "open" for 3 years. So that is how long the "number" of pubs are "trading."
Here are the AC Nielsen reports in full for our perusal.
http://www.freedom2choose.org/forum/viewtopic.php?t=3863
Sorry, link didn't seem to work. Let's try this (only 3 weeks ago).
The West Midlands and Scotland have been hit hardest in the national pub blight that sees six pubs close per day.
That’s a key finding of CGA’s survey of recent closure rates nationally.
The figures are broken down by Parliamentary constituency as part of the campaigns by the British Beer & Pub Association, the Campaign for Real Ale and the All-Party Parliamentary Beer Group to show politicians the scale of the closure crisis.
It compares pub numbers in February 2009 with figures from June 2007, just before the English smoking ban, and data from the last general election in 2005.
More than half of constituencies with fastest closure rates since 2007 are in the West Midlands and Scotland.
Also Martin Dockrell of ASH recently said that the number of drinking licenses in Wales have gone up 5%. Firstly ASH are pathological liars, but if it is true it strikes me that is proof that off licenses and supermarkets are booming at the expense of pubs. Because you can smoke at home.
QED.
www.herald.co.uk - listed under - number of pubs in scotland rises since ban publishd 10/08/08. There are many factors affecting pubs at the moment, not least that we are in the middle of a recession. But the smoking ban has had little effect, if any.
www.theherald.co.uk/news/news/display.var.2426919.0.Number_of_Scottish_pubs_rises_since_smoking_ban.php
Ah Neil, just clicked on your blog, all is explained, a Labour Supporter.
Can I ask you if the smoking ban is so "successful" why did it need a change in the law and with such draconian fines?
Also why I am here what do you think of the way that ZanuLabour have trampled on civil rights in this country? Including pub owners who are not allowed to let people indulge in a legal past time on private property?
Neil: Did you bother to read past the headline in your article?
Official figures may not reflect this change for years. Many of the pubs included in yesterday's statistics could even be phantoms because publicans, even when they shut up shop, keep their licences - which are only renewed every three years.
I believe DaveA highlighted this a short while ago.
Confirmation bias, I think it is called.
As someone who thinks Labour should go and hang themselves for that they have done to community and lifestyle choices, I sincerely hope that your delusion continues for at least another year. Cos it will be fun to see your party weep like confused children when the results come flooding in, firmly rejecting you from your major strongholds.
:-)
Neil from The Publican confimation since the smoking ban Scotland a staggering 10% of all pubs have closed in Scotland. It also confirms that licenses stay on the books for up to 3 years.
"The Scottish Beer and Pub Association cites Industry research showing at least 450 pubs have closed since the smoking ban, almost 10 per cent of Scotland's entire pub stock."
http://www.thepublican.com/story.asp?sectioncode=16&storycode=60900&c=1
Dick, DaveA: Some pubs will close, others will prosper under the ban. There are pubs round here that are booming BECAUSE of the ban.
My personal feeling is that the better pubs - well furnished, good service, attractive outside terracing for smokers, are doing very well indeed while other run-down pubs might well have closed anyway, with or without the ban. They tell you 10% have closed, but how many have opened or seen business boom? Of course we can't just ignore the recession and blame all these closures on the ban, the picture is much more nuanced.
Finally, I think it says more about you than me that you find my support for Labour relevant in all this. It is a convenient way of dismissing an argument without actually having to engage in the actual evidence. I would imagine that there are some Tories out there that occasionally talk sense, well hopefully anyway. ;o)
Neil, come off it. Either we are going on the basis of "personal feeling" (there is a vast body of personal feeling that the smoking ban has been disatrous) or we are going on the basis of hard statistics (which also show that the smoking ban has been disastrous).
If having a non-smoking pub is such a brilliant idea, how come there were hardly any before the ban? We had no smoking cinemas and no smoking kid's restaurants for years before the ban, because there was demand for them, don't forget!
Here is an FT article from 28/6/08, do you have anymore "feelings?
"Pub closures are now running at a net rate of 27 a week, according to the British Beer and Pub Association. In total, 1,409 pubs closed in 2007 - up from 216 closures in 2006 and 102 in 2005. "This is the highest rate of closure ever," says Rob Haywood, chief executive of the BBPA. "The industry is in a crisis."
The bingo industry has suffered 37 closures in the last year, 6 per cent of the sector and double the closure rate of the previous three years. This week, the government said it will restore the lost gaming machines to clubs to help the industry through its "grave" crisis.
Gala Coral, operator of Gala Bingo, says growth prior to the smoking ban was running at 10 per cent. "Since the ban, we have seen a very sharp fall in revenue and admissions," says Neil Goulden, chief executive of Gala Coral. The smoking ban is entirely responsible for that, he adds.
Ian Burke, chief executive of Rank Group which operates Mecca Bingo, says: "The ban was always going to affect our bingo clubs, given the number of our customers who enjoy smoking."
"A year ago, pubs and bingo clubs were pointing to the experience of Scotland, where the smoking ban came into effect 15 months before England, and predicting recovery in their revenues within two years.
But some now predict even more troubles ahead. PwC, professional services firm, says some 2,000 pubs could cease trading this year, and has revised its forecast on the number of closures over the next five years from 5,000 to 6,000..."
"David Trunkfield of PwC says bingo has declined by 15-20 per cent in the last year, and attributes more than half of that decline to the smoking ban. "The smoking ban has had a very strong impact," he said. "It has had a bit of an impact on pubs, but other things are going on there."
Those "other things" have caused the six biggest listed operators to lose 64 per cent of their combined market capitalisation."
http://www.ft.com/cms/s/0/9a784a92-44ab-11dd-b151-0000779fd2ac.html?nclick_check=1
Neil, would you like anymore hard facts and figures?
"As many as 5,000 pubs and bars in the UK could cease trading by 2011 through a combination of the smoking ban, a clampdown on drinks promotions and declining beer sales, experts have warned." And "Stephen Broome, licensed sector industry specialist at PwC and author of the From Beer to Eternity? report, said: "The experience from Scotland indicates that the overall impact of the [smoking ban] legislation should not be overestimated, but some premises will feel the impact more than others. Drinks-only venues, and those without external spaces for smoking, are likely to be most vulnerable."
They then went onto update this report 30/6/08:
"More than 6,000 pubs in the UK could close in the next five years if they do not deal with the impact of the smoking ban and the current squeeze on customer spending.
According to a report by consultancy PricewaterhouseCoopers, 2,000 pubs could cease trading in 2008 alone as the industry continues to struggle to adjust a year after the smoking ban was introduced throughout the UK."
http://www.caterersearch.com/Articles/2 ... eport.html
http://www.caterersearch.com/Articles/2 ... g-ban.html
gala bingo! Gala bingo! Come on! Is this really a national disaster? Isn't a good thing that people are finding something else to do other than gambling in dingy smoky halls? Ok. Some dingy run down pubs have closed, other pubs are doing very well, agreed? Overall, the impact of cheap off licence and supermarket booze is a much bigger threat to pubs and in a recession lots of industries are suffering so quoting a few closures is meaningless without giving net figures. Some new pubs have opened and i can name plenty in brighton that i know are doing better since the ban. Raise off licence age to 21 and tax off licences booze sales more and pubs would boom. There certainly is no shortage of pubs anyway - rural pubs need to be more imaginative, become post offices, grocery stores, restaurants combined etc, as well as serving beer. Anyway on the one hand the right wing press moan about binge drinking and then on the other the decline in alcohol sales - apparently a 6% decline since 2005, including off licence sales. So this government can never win. Will you guys really be happy when 23 home tory scumbags are running the country and giving the richest even more tax breaks at our expense?
"gala bingo! Gala bingo! Come on! Is this really a national disaster? Isn't a good thing that people are finding something else to do other than gambling in dingy smoky halls"
It is certainly a disaster to the people who had jobs there. It is also a disaster for the people who meet up for a social gathering. Now stuck inside because of ZanuLabour's bogotry.
My mum went to bingo and for £10 a visit gave her 4 hours of fun.
Neil, really!
"i can name plenty in brighton that i know are doing better since the ban"
Yes please. Name them, and send me the email addresses of the people who own or manage them so that I can get in touch directly.
"tax off licences booze sales more and pubs would boom"
If you want to achieve this, then do what I said in my post - scrap the EU-imposed VAT and increase beer duty to compensate.
DaveA, as much as I like Neil H, you can't defeat his 'arguments' with trivialities like facts and logic. That much you may have noticed.
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