The pub champion?

There's an interesting article in the Morning Advertiser today about CAMRA's misguided idea of preventing pubs being sold as anything other than pubs. As I have argued before, the Assets of Community Value scheme addresses the symptom rather than the cause of the pub industry's malaise.

Initially intended to protect historic pubs, CAMRA now wants all pubs included in the scheme, starting with Otley, West Yorkshire where nearly every pub has been listed regardless of the views of their owners.

One such owner is the author of today's article. I was particularly struck by this reference to Greg Mulholland, the Lib Dem MP who poses as the pub champion (literally)...

Linda & I are co-owners of the Old Cock pub in Otley. When we purchased the building in 2007 it needed a complete renovation. Our application for Change of Use to transform the building into a pub was refused twice by Leeds City Council, but with our determination to create the pub we took it to a National Planning Appeal and 18 months later Leeds City Council were overruled.

During this time we had a £200k mortgage to pay and had to employ expensive professional help to fight the Council.

Our local MP Greg Mulholland was unwilling to help as supporting the opening of a new pub was in conflict with his public efforts to save existing pubs. With hard work and securing finance against our home and another business we proudly opened in September 2010.

In January of 2015, without consultation and against our will, led by Mulholland, Otley Pub Club nominated, then successfully listed, 19 out of 20 pubs in Otley as Assets of Community Value.

It's important to remember that the decline in pub numbers is not all about closures. It's also about whether new pubs can open. If, as CAMRA claim, pubs are in decline because greedy PubCos keep selling off viable pubs to developers, it should provide an opportunity for new pubs to open. I don't believe this claim - or, at least, it is only a small part of the picture - because the statistics do not support it. The root cause is a lack of demand thanks to the smoking ban and taxation, but if, as CAMRA insist, demand exists then we should be seeing new pubs open up to meet it. How telling it is that local councils make this difficult and the 'pub champion' is not interested in helping.

This pub in question here is five years old and is in a building that is 261 years old. It is nevertheless being protected like a historic monument. Is that a problem? Well, yes it is...

The restrictive covenant on our title deeds limits future lending against our property. Banks are reluctant to lend against a building that actually cannot be sold for 6 months. This renders us trapped with a loan secured on our home and few alternatives available to us. We are now handicapped in raising additional funds, to sustain our business or for refurbishment. This increases our business risk and potentially the employment we offer to 10 local people.

Industry experts have reported that an ACV listing can negatively affect pub values by up to 30% indicating that our business and property have decreased in value. Certainly, we would not have purchased our building with a restrictive covenant in place and Otley would not have The Old Cock today. We know, if we come to sell, other possible investors may be deterred. Simply put, when we invest our money in a business we need to know we have options should it fail or our personal circumstances change, for example, through unexpected illness etc. Be that an alternative proposition or selling. Thus an ACV becomes a disincentive to individuals who may be attracted to purchasing and running a pub. Waiting around for six months whilst Leeds City Council and a community group decide what is happening to our own personal investment is an unattractive prospect.

So many unintended consequences. Unintended, but not unforeseeable.