Britain Trips Up and Props Up Its Declining Pubs

Market forces and regulations are hurting Britain's traditional pub culture. Ergo, the need for regulations to help save them.

Is the traditional British pub going the way of the British Empire?

England's pubs are an integral part of the nation's social fabric. In addition to serving as drinking establishments, they're places where one can bring kids and, on occasion, leave them behind.

But their numbers are in steady decline.

The future of traditional pubs is certainly on the minds of Britons, whose relationship with them stretches back centuries.

A New York Times article this week looked at the declining pub numbers and tackled many of the issues that Britain's pubs face. Those include declining beer consumption nationwide, real estate prices, and the country's unique pub ownership system—in which pubs often are "tied" to a brewer through ownership or contract. (A little more than one-third of pubs operate independently.)

Those issues, though quite real, fall largely outside of the relationship between pubs and government. But I find other issues facing Britain's pubs to be particularly interesting because they highlight this eternal question: How will government attempt to solve the problems it creates?

The answer, typically—and especially, when it comes to food laws and polices—is more government.

One issue facing Britain's pubs is taxation.

While the Times noted the tax issue briefly—stating that the UK government last year "reduced the tax paid on every pint of beer, by a penny"—the problem runs much deeper. That minor blip halted decades of increased taxes. Today, more than one-third of the average pub price for every pint is swallowed by taxes, according to data provided by the Campaign for Real Ale, a UK drinkers' rights group.

Another issue is licensing related to pub closing times.

For generations, early pub closings were "as much as part of English lore as Big Ben and double-decker buses," reported the Washington Post in 2005. A law that took effect that year allowed some pubs to pay more in fees to stay open later. But few pubs have done so. And many pubs' licenses still don't permit them to be open at times when most people might want to grab a pint.

Earlier this month, for example, the UK government declared that pubs "will not be allowed to open late during England's opening World Cup [football soccer] match this summer." That game, against Italy, begins at 11 p.m. on a Saturday night, when at least some pubs would require a one-time exemption, costing about $35 per pub, to stay open later.

Prime Minister David Cameron quickly overruled his Home Office. But the point—that many of England's pubs are forced by regulators to close earlier than customers might want—remains.

Despite that fact, a law enforcement lobbying group sounded the alarm last year over what it characterized as a rise in drunken "mayhem," the result of some pub hours having been extended.

But a subsequent University of Cambridge study poured cold water on the claims.

"When cross-referencing police records of street violence with changes to licensing hours across the city," a Cambridge story on the research notes, "the researchers found no evidence that increases in alcohol availability had any association with increases in levels of violence."

Still, some of the 2005 reforms have been rolled back.

The Daily Mail led a successful effort to enact a "blanket ban on late opening in trouble spots" in 2012—despite the fact that its readership would no doubt suffer without those ubiquitous stories of model Cara Delevigne spilling out of those same trouble spots in what appears to be a stupor.

Some new fees for obtaining 24-hour licenses now exceed the equivalent of $7,000.

With pub numbers declining, the UK government is moving in a predictable, populist direction, erecting barriers to protect the nation's pubs by declaring individual pubs an "asset of community value." The UK's Community Pubs Minister Brandon Lewis, whose office is in charge of doling out these designations, reported last year that his office had already "saved" 100 traditional pubs.

Charitably, it's unclear that such action is prudent. At least part of the decline is due to market forces. And, as the Times notes, Britons are drinking nearly 25% less than they were just ten years ago.

A December 2013 U.K. government report, "Modelling the Impact of Proposed Policies on Pubs and the Pub Sector," concluded that "there may be up to 6,000 surplus pubs in the UK."

And a report last year in the Guardian said there are now simply too many pubs in Britain to support demand.

"As many as 4,000 British pubs will deservedly go out of business over the next year because they are 'stuck in the 1980s' and complacently offering 'indifferent' food, drink and service, a national industry guide has predicted," reported the Guardian.

Most signs point to the continued loss of traditional British pubs. To the extent that's the result of waning demand, it's nothing more than a fact of life—however unfortunate some may find it. But to the extent it's the result of senseless regulations and taxes, Britons have a right to be outraged.