Tide of discontent threatens to wash away British piers
With the Chancellor throwing sand in their face and the black cloud of euro slot machines on the horizon, it's a tough life, writes Peter Bartram
Sunday 08 August 1999
Undercapitalised but arguably overtaxed, Britain's traditional seaside businesses are in crisis. Will it be another summer of discontent for the pleasure-pier owners?
Anthony Brenner, the pier's managing director, is in no doubt about the problems: "Margins are being squeezed, competition is getting greater, legislation and taxation are becoming more difficult."
Mr Brenner took over the pier from his father in 1983 and plans to hand it on to his son, Nik, and daughter Lucie, both already in the business. Britain's dwindling band of pleasure-pier owners are looking out to sea this summer with worried faces; the pier is under attack.
Eleven of Britain's 55 piers have changed hands in the past few years or been rumoured to be on the market. Many have suffered because of lack of investment.
Tony Wills, secretary of the National Piers Society, says some are falling down: "They don't earn enough money to offer a return on capital; they need major capital works, and no funds have been built up over the years to preserve them."
Dedicated pier families such as the Brenners (Anthony owns Teignmouth, while cousin Rod runs Weston-super-Mare's), or the Mitchells (Skegness and Paignton), are determined to fight on. But overall, says Mr Brenner, he is pessimistic.
The pier business is still reeling from Chancellor Gordon Brown's decision to increase licence duty on prize slot machines by as much as 36 per cent in his first budget. What pier owners find unfair is the fact that they pay the same duty as pub owners, whose machines are allowed to pay out cash prizes three times the size. Where amusements are designed for more than one player, the costs multiply. The tax on so-called "pusher machines", for example - where the object is to get a pile of 10p pieces to topple over - is pounds 645 for each player position.
Mr Brenner pays pounds 15,500 every year in licence money for machines in his pier's amusement arcade. "Then you pay VAT on the takings and corporation tax on the profits. It's a very highly taxed business," he complains. Since leisure machines generate 20 per cent to 45 per cent of their revenue, pier owners have made a lot of the taxation issue .
Stuart Greenman, who is in charge of government relations at BACTA, which represents Britain's pay-to-play leisure machine industry, wants the government to cut the licence duty. Labour's group of seaside MPs, chaired by Gordon Marsden, MP for Blackpool South, is said to be sympathetic. Mr Greenman is hopeful, but it's hard to see New Labour making a reduction in the tax on one-armed bandits a vote winner in the run-up to the next election.
Pier owners are also worried about the European single currency. Mr Brenner says he has 300 coin slots that will need conversion if the euro comes to Britain. The bill could be anything from pounds 200 to pounds 300 a machine, with some older amusements having to be scrapped, incurring write-off charges.
Then there's the problem likely to be caused by the different electronic signatures from coins manufactured at different European mints. A euro made in Greece may not operate a machine in Britain.
The minimum wage and enforced holiday pay have increased operating costs. Mr Brenner runs Teignmouth pier with a staff of five in the winter but needs 20 people in the summer. "We always look after our regular staff but I don't honestly see why casual summer staff - mainly students - should have holiday pay," he says.
And then there's the changing face of British gambling. "The lottery hit our income by 10 per cent in its first year and it hasn't come back to what it was," says Mr Brenner.
The National Heritage Fund has given pounds 16m in lottery grants to repair piers such as Penarth, Southport, Swanage and Clevedon, but critics argue that renovation is a short-term solution. A restored structure counts for little, they say, if money for future maintenance cannot be made.
Diversification and new sources of revenue are the only guarantee of survival. At Brighton's West Pier, promised grants of pounds 11.6m, the Eugenius Consortium (the original pier was built by Eugenius Birch) is planning a development of restaurants, bars and a "performance area", taking the concept of the seaside pier up-market. That may work in Brighton with its sophisticated visitors. In towns that rely more heavily on the bucket- and-spade brigade, it may be a question of catering for changing consumer tastes. Mr Brenner spends pounds 40,000 a year on equipment such as video games. Another option is to try to "deseasonalise" the pier. Children's rides are perennially popular, and five years ago Mr Brenner decided to keep the pier open all year round.
Even so, it's difficult to deny the importance of the weather to the business. Grim days at the beginning of last season cut his revenue by as much as one-quarter in the three months from May to July. The amusement hall may be a refuge from the rain but who wants to spend money on ice- cream, one of the pier's staple offerings, when it is cold and damp?
"The ideal day is sunny but with a cool breeze coming up about 11am so that people move off the beach looking for something else to do. I've had bad knees from praying," Mr Brenner says. These are tough times: "I'm 57 and I'm working harder than when I was 25."
But, when the sun is shining and holiday-makers have money in their pockets, it's not all gloom: "I have a feeling that this season is going to be one of the better ones.
"There is a sense of prosperity about the British public at the moment. I doubt if it'll last for that long, but at the moment things are looking bright."
It's not quite the end of the show for Britain's piers.
n This article first appeared in the current edition of `Director' magazine.
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