Pub closures set to cost the Treasury £250m in lost taxes

The British Beer & Pub Association warned the Government that it is set to lose more than £250m in tax revenues this year, if the current rate of pub closures continues.

The number of pub closures abated slightly in the second half of 2009, as the recession eased, but they are still shutting their doors at an alarming rate, according to the trade body. According to BBPA, 39 pubs a week are now closing, which is down from the rate of 52 a week in the first six months of last year.

Brigid Simmonds, the chief executive of the BBPA, said: "The UK may be edging out of recession, but times remain very tough for pubs." The rate of closures was the highest among independently-owned "free houses" and the lowest among managed pubs.

It also found that "food-led" pubs continue to "weather the current storm better than drink-led premises" with a closure rates three times less. The better performance of food-centric pubs has largely been a feature of the industry since the smoking ban came into effect in England in 2007.

The BBPA said there are now 52,500 pubs in Britain, sharply down on the 58,600 boozers when the Licensing Act came into force in 2005.

In 2009, 2,365 pubs closed their doors, equal to 45.5 a week. Ms Simmonds said: "Continuing pub closures, and the five per cent decline in pub beer sales we reported last week, confirm that pubs are not out of the woods yet."

In the second half of 2009, 22 free houses closed a week, compared with 12 a week among tenanted pubs, despite the latter being far more plentiful. According to the BBPA, just five managed pubs a week pulled down the shutters in the final six months of 2009.

Ms Simmonds stepped up her pressure on the Government by warning that another above inflation rise in beer tax in the next Budget would be a "further blow to struggling licensed premises". She added: "In the current climate, the last thing pubs need is a higher tax bill in the Budget. This won't help the public finances either, as closing pubs, job losses and falling beer sales mean less tax revenue for the Treasury."