Don’t expect favours from hung Parliament

Pubs up and down the country held election parties last night and today candidates of all hues, both elected and rejected, will be celebrating victory or easing the pain of defeat by sharing a drink with their supporters.

At election time the pub is a focal point of many communities, and one that politicians are not slow to exploit.

All the major parties offered words of support for the great British pub in their manifestos, but now that the dust is settling and the party leaders are jockeying for power, will they keep their promises? The omens are not encouraging.

Take the British Beer and Pub Association’s “Back the Pub” campaign, which urges government, industry, local authorities and other interested parties to work together to support British pubs as part of the effort to foster community life and promote economic recovery.

By the time the polls opened yesterday, 425 parliamentary candidates had signed up to it. That sounds encouraging until you realise that is only just about 10% of the 4,150 who stood for election.  

While the backing came from across the political spectrum, 90% of candidates did not care sufficiently about the future of the pub even to pay lip service to the campaign.

That’s not going to cause sleepless nights in the Treasury, which has played a leading role in the demise of 4,000 pubs at the cost of 40,000 jobs over the past two years, according to the BBPA. And with about 25% of the new MPs being “freshers” at Westminster, the potential for rejecting the official line is not strong. Don’t expect martyrs.

So it is no surprise that pubs groups, led notably by J.D. Wetherspoon, are counting on little assistance from the new Commons. The company, which runs about 770 pubs in the UK, says it is being cautious about the outlook for the next 12 months “as a result of the annualised effect of recent tax and duty increases and higher interest charges, combined with the risk of more subdued consumer expenditure.”

The group’s like-for-like sales dipped by 0.8% in the 13 weeks to 25 April, following the VAT increase in January and the new duty rates imposed in the Budget. That knocked almost 10% off its shares, with other large pub operators such as Greene King and Mitchells & Butlers falling in sympathy.

As Wetherspoon recognises, consumer expenditure faces a squeeze for reasons outlined on numerous occasions by Finance on Friday.

There has been a modicum of optimism in the sector over the past few weeks, but today is the morning after the night before and the bill is about to be presented.

Finance on Friday, 07.05.2010