Pick Your Poison: Planning Policy Protecting Pubs Is Being Undermined By Pricing Them Out Of Existence

AG&G’s Michael Penfold on the contradiction between government planning policy designed to protect pubs as a property use class and the reality of economic policy which is forcing the closure of underlying pub businesses.

Successive governments have handed pubs greater planning protection over the past 15 years with a focus on stemming the loss of pubs in the UK. This sentiment has widespread support across the political spectrum. However, is it politically viable to maintain this position whilst saddling the sector with costs that will invariably force the closure of thousands of pubs. 

It’s generally an easy vote winner for a politician to publicly lambast the loss of pubs and talk up the need to value and protect them. Pubs are after all the beating heart of our local communities and a symbol of British culture going back hundreds of years. 

This sentiment has shaped national and local planning policy over the last 15 years by removing permitted developments rights along with the implementation of national and local planning policy to protect against the loss of pub use and amenity space (gardens, car parks, function rooms etc) whilst giving local communities the right to bid for such assets for continued use.

Yet these protections are being massively undermined by the contradiction of a government loading the sector with heavy costs that will force many pubs to close as a result. Wage increases, energy costs, business rates, alcohol duty hikes and over-regulation are increasingly pushing pubs to the brink. 

The numbers speak volumes; the British Beer & Pub Association (BBPA) has forecast that 378 pubs are set to close in 2025 (an increase from 300 pubs in 2024). Since the start of 2020, roughly 2,283 pubs have closed in England and Wales alone. This trend is set to continue at pace as the sector absorbs yet more costs introduced by the recent Budget in the form of national minimum wage increases at an inflation busting 4.1% for eligible workers aged over 21 years old and a business rates hike with a projected average cost increase of 30% for pubs. 

Sir Tim Martin, founder of JD Wetherspoon, recently said ‘I should have opened a small supermarket in 1979, not a pub’ on the back of measures announced in the Budget. He went on to say that ‘Prices will definitely rise across the industry, profits will be under pressure and investment will be curtailed’. He has long warned that due to increasing alcohol duty and operating costs, pubs have lost half of their beer volumes to supermarkets over the last 25 years. 

It’s difficult to ignore the absurdity of the situation as on the one hand the government wraps pubs in a protective blanket via greater planning protection. Whilst on the other hand it strangles the sector with an ever-tightening financial noose around the neck. It is an impossible square to circle and this will become increasingly clear as more pubs close due to additional costs. These pubs will then just sit empty for long periods of time as a result of planning policy enforcing a use that is increasingly unviable due to government economic policy.

Planning protection has become little more than a performative act of political theatre in a world where pubs are increasingly under threat due to successive governments’ failure to address soaring costs and the lack of viability of the underlying businesses. Preserving a building use while allowing the operators inside them to collapse is not protection for our pub sector. It will only lead to more boarded up pubs that cannot be reused due to planning policy. 

The irony is not lost on me that the country faces a severe housing shortage. This at the same time as more pubs are closing and therefore sitting idle on our streets due to planning constraints that deter developers from taking them on. Navigating the planning system takes time and money. Property developers are increasingly reluctant to consider pubs as a result of the planning protection in place which in many cases doesn’t allow them to even apply for planning permission until a 24-36 month marketing campaign has taken place to demonstrate a lack of pub operator interest in continued use.

The current government has not created this situation, it has been long in the making over many decades due to a number of factors including changing consumer habits and ever-increasing costs. But they have failed to act by giving adequate protection to underlying pub businesses that sit within the buildings they and previous governments have sought to protect through planning policy. 

This government now need to decide if they are ready to provide the financial support required to keep pub businesses alive or perhaps it’s time to review planning policy to allow greater flexibility and avoid a scenario whereby thousands of pubs across the country sit vacant without any real prospect of helping to address a national housing crisis that threatens to prevent younger generations from having an opportunity to own their homes.