In his contributions to this debate Lord Bilimoria spoke twice. In his first contribution he notes his past and interests with regard to beer and British Pubs. He discusses the various amendments and their impacts on pubs and concludes with his full support for the amendments, although they are not the full solution to the problems facing pubs, as they work to protect British pubs. His second contribution is to note that the Lord speaking at the time, Lord Hodgson, does not appear to him to be speaking for the pub industry and certain groups that represent them support the amendments.
Neighbourhood Planning Bill
After Clause 13, insert the following new Clause—
“Change of use of drinking establishments
(1) In regulation 3 of the Town and Country Planning (Use Classes) Order 1987, after paragraph (6)(o) insert—“(p) as a drinking establishment”.(2) Before exercising his or her powers under section 41(1) of this Act, the Secretary of State must exercise the powers conferred by sections 59, 60, 61, 74 and 333(7) of the Town and Country Planning Act 1990 to remove permitted development rights relating to the change of use or demolition of “drinking establishments”.”
Lord Bilimoria: First Contribution
My Lords, I must declare my various interests in this area: as the founder and chairman of Cobra Beer; as the chairman of the Cobra Beer Partnership Ltd, a joint venture with Molson Coors, one of the largest brewers in the world and the largest brewer in Britain; and as an officer of the most popular and largest all-party parliamentary group—the All-Party Parliamentary Beer Group.
I came to this country as a 19 year-old student from India and remember my first evening here, staying at the Indian YMCA in Fitzroy Square in London. Opposite was the White Horse pub. That was my induction to Britain. Pubs are a way of life in this country. I have been lobbied and lobbied by various organisations, including two of the most prominent associations in our industry. The British Beer and Pub Association, or BBPA, represents companies that between them own 20,000 pubs and brew more than 90% of the beer sold in the UK. The ownership ranges from UK plcs, large companies such as my joint venture partner Molson Coors, privately owned companies, independent family brewers, microbrewers and divisions of international brewers. The association is campaigning to support a thriving brewing and pub industry in the UK. After all, pubs are at the heart of our community.
The amendments in this group are important. When one wishes to recategorise a pub from an A4 outlet, a drinking establishment, planning permission to change it to an A3 outlet—that is, one serving food and drink —is required. Nowadays pubs very much rely on food for their business. In June we are sponsoring London Food Month. Britain was the laughing stock of the world regarding food when I came here in the 1980s; today, London is the food capital of the world and Britain is famous for its range of cuisines. Our pubs are phenomenally good at providing excellent value-for-money food. These amendments are important because pubs are vital to the community, and existing planning rules require flexibility to allow pubs change of use.
Pubs increasingly focus on the sale of food and serve more than 1 billion meals a year. While they are categorised as drinking establishments and food-and-drink premises, there are no fixed definitions. Pubs, wine bars and other drinking establishments are permitted to change from A4 to A3 without a planning application. If that right were removed from pubs, there is a real concern that a pub could be penalised and prevented from increasing its food offering. The local authority could instead insist that the pub needed to apply for a change of use if its food turnover reached a certain threshold. This would lead to disputes, costs and complexity, and increased time taken by the local authority.
Drinking establishments are also not just traditional pubs but sometimes wine bars, microbreweries and other establishments, such as those for casual dining. We need to retain flexibility in the distinction between pubs, bars and restaurants. They must continue to have the right to convert to A3 in appropriate circumstances without planning permission in order to prevent distortion of the market.
The impact of the amendment on property values could be significant. The BBPA suggests that there should be full consultation and an accompanying impact assessment. Does the Minister agree?
Then there is the whole issue of the asset of community value process. ACVs were introduced to add protection to pubs and other buildings. A building that has ACV status is already subject to the same planning protections outlined in the amendment, but the vast majority of existing ACVs have been placed on pubs. While offering protection, they are complex and the amendment provides protection to some pubs that are not necessarily an asset and are, in reality, barely viable. Some pubs are historic, and the BBPA believes that pubs should be designated ACVs only if they have a future and are supported by the local community.
As regards minor planning changes, the amendment relates only to planning permission for change of use and demolition. It is imperative that this remains the case and that planning permission under permitted development rights is not required for minor changes to properties because it would deter investment.
To conclude, this is part of the wider support required for the pub sector. These planning changes are not the complete solution to this situation and pubs are closing down every year. Pubs have third-highest excise duty rates in the EU for their core product, beer —rates many times higher than in Germany, for example. Pubs are disproportionately penalised by business rates, a topical subject at the moment. Compared to other sectors, pubs overpay by half a billion pounds per year on a turnover basis. The sector has huge regulatory burdens, and a change in the planning system should be considered as part of a broader package of support for the industry.
In 2013, CAMRA, the Campaign for Real Ale, conducted a survey of council planning officers and found significant dissatisfaction with current planning protections for pubs: 65% of respondents were not satisfied that existing planning regulations gave sufficient protection to public houses from change of use or demolition; 65% of respondents supported a change in planning regulations to require planning permission to be in place before a public house could be demolished; and 67% of respondents supported a change in planning regulations to ensure that the conversion of a public house to any other use would require planning permission.
In 2015, CAMRA did a consumer poll that showed strong public support for better planning protection for pubs: 68% of respondents supported planning permission being required to demolish a pub and 69% of respondents supported planning permission being required to change the use from a pub to a shop. If we had had a supermajority clause in the European Union referendum, those figures would have passed all the thresholds. CAMRA urges that local people be empowered to keep valued community pubs open. As a result of these amendments, councils would be able to deliver planning policies designed to support the retention of valued pubs and reduce the burden of assets of community value on communities, councils and businesses. I wholeheartedly support these amendments. They protect British pubs, which are a valued part of our wonderful country.
Lord Bilimoria: Second Contribution
I thank the noble Lord for giving way. I made the point about pubs increasingly offering food. That is happening—it is part of their offering, along with the drink. But the noble Lord’s argument seems to imply that he is not for the British pub industry and British pubs. The BBPA, which represents 20,000 pubs in this country—the majority—and CAMRA, which represents a huge part of our beer industry, feel that these amendments are good. The noble Lord has not convinced me, for a start.