https://consciousnessofsheep.co.uk/2025/04/20/okay-boomer/
If you are a wealthy boomer, or one of the few remaining members of the silent generation that hasn’t succumbed to some form of dementia – who at least remember the end of World War Two – you might welcome Keir Starmer’s announcement that the pubs are to stay open until 1.00am on 9 May 2025 in celebration of the 80th anniversary of Victory in Europe (VE) day. For younger generations, whose grasp of history is so appallingly bad that they could not tell you where the instrument(s) of surrender was(were) signed… still less by who, something that happened eighty years ago is unlikely to be worth celebrating. Not least because the anniversary of VE day falls on a Thursday this year. So, unless you are hugely lucky to have a boss who will give you a day off on the Friday, the prospect of spending a lot of money that you don’t have, commemorating something you know nothing about, in order to go to work feeling tired and hungover, is hardly the blessing that Starmer (himself a boomer) appears to think it is.

Starmer, who is two years younger than me, likely grew up surrounded by people who had lived through and served during the war. And in those days, when Britain was still a prosperous empire – albeit a rapidly fading one – and when militarism was still seen as something to celebrate, people took any opportunity to commemorate events during the war… Battle of Britain Day, Dunkirk Day, D-Day, you name it and people would go and get drunk in recognition of it. And, of course, governments courted popularity by relaxing licencing laws introduced in 1872. As the post-war boom gave way to the stagflation of the 1970s and the depression of the early-1980s though, that pub culture began to slowly wither. By the 1990s, the campaign group CAMRA began to raise the alarm about pub closures. Initially, the concern was with rural pubs with small catchment populations, which were unable to increase footfall to offset rising costs. Today, the economic blight on pubs (and other hospitality businesses) has infected every area of the country.

There are many reasons for the slow death of pub culture in the UK, but government is among the biggest. And this is especially true of the current government, whose most recent impositions may well sound the death knell for Britain’s hospitality sector entirely. For decades, alcohol has been a cash cow for governments seeking to increase income without raising income tax – it was a rare budget indeed, where the duty on alcohol was unchanged… rarer still for it to be reduced. Today, the government takes a third of an average £4.80 pint of beer in duties and taxes, while the pub owner/manager takes just 12 pence in profit – the remainder paying for the ever-increasing overheads involved in running a pub.

Meanwhile, shoppers can pick up a four-pack of beer (roughly three pints) at the local supermarket for around £6.00 – which is where the rot began. Even before the 2008 crash, young millennials got into the habit of “loading up” on spirits at home before going out to the pubs and clubs so as to avoid paying for a lot of drinks later. And following the crash, as people’s real incomes fell, going to the pub was gradually replaced by inviting friends around to drink supermarket-bought alcohol. Pubs lost customers, and every part of the country began to witness shuttered pub buildings waiting for demolition or for property developers to convert the building into flats. Needless to say, things have not improved after two years of lockdown and three years of self-harming sanctions.

By the end of 2024, and despite various government covid stimulus packages (such as relief from business rates) Britain’s pubs were closing at an alarming rate. This ought to have rung alarm bells among those who claim to be managing the economy, because pubs are a modern-day version of the canary in the coalmine. Entirely discretionary and blown on the winds of rising and (more often) falling real incomes, pubs are among the first private sector businesses to close in the face of hard times simply because – unlike, say, your energy company – they cannot pass on rising costs in the form of higher prices without haemorrhaging customers. And so, the growing pace of closures to the end of last year point to a wider crisis for the non-monopoly private sector in 2025… it is a crisis that the Labour government has not only chosen to ignore but has decided to make worse.

The three big hits to Britain’s pubs – and, indeed, to the wider private sector – are first, the hike in business rates designed to close the huge deficit between council income and council spending (exacerbated by high interest rates) which are ridiculously levied on the theoretical value of a business’s property rather than its income – making town and city centre businesses far more costly to run. Second, the massive increase in Employer’s National Insurance (a tax on jobs) which has risen by more than 20 percent on someone paid the National Minimum Wage. Third, the big increase in the National Minimum wage, particularly for younger workers of the kind typically employed in the hospitality sector. Even before these came into force this month, the private sector in general, and hospitality in particular, were pre-emptively shedding jobs at the fastest rate since lockdown – and excluding lockdown, at the fastest rate in the dataset. For the moment, this has been offset by increased government employment and higher than inflation public sector pay increases. As the Office for National Statistics puts it:

“This change was highest in the health and social work sector, a rise of 70,000 employees, and lowest in the accommodation and food service activities sector, a fall of 92,000 employees.”

In other words, while government employment is – for now – preventing a big increase in unemployment, the private sector in general, and hospitality in particular, is shedding jobs at an alarming rate. And adding to our woes is the crash in reported job vacancies, which are now below their 2019 level and which still include a high proportion of “ghost jobs” as employers harvest CVs for the hoped-for day when economic growth returns. So that, not only are large numbers of private sector workers losing their jobs, but new jobs are getting harder to find. As mathematician Sasha Yanshin explains, the proportion of 18 to 21 year olds unemployed for more than a year spiked to 21.7 percent in March, even before the increased cost of employment kicked in.

Growing youth unemployment is partially related to the problem of wage compression caused by the rapid growth in the Minimum Wage in recent years. One reason why the introduction of the Minimum Wage in 1999 did not result in the layoffs and business closures feared by libertarian commentators was that the annual increases were carefully calibrated by committees which included business representatives, trades unionists, and independent economists. In recent years, and in pursuit of a few additional percentage points in the polls, governments have taken to dictating increases (which someone else has to pay for) far higher than much of the non-monopoly private sector can absorb. And one of the – probably unforeseen – consequences has been the closure of the gap between the minimum and the average wage to just £10,000 in the UK today.

As Yanshin puts it, why bother employing an inexperienced 18-year-old or a new university graduate, when you can employ someone with far more experience for just a few thousand pounds more… particularly when the recent government changes mean that the cost of employing younger workers is rising at the fastest rate.

With older pub-goers – the only ones who can still afford it – tending to save money by going home early, pub owners are increasingly closing early and/or not opening on quieter weekdays. But where previously this could be seen as a choice, it is now becoming a necessity. It is incredibly difficult for a small business owner or manager to look someone they have worked with in the eye and tell them they are fired. And despite the ongoing march to extinction of the UK’s hospitality sector, most pub owners and managers have been reluctant to do so. Instead, the immediate response to the huge increase in costs this month, has been for pubs across the country to do the last thing short of sacking people… cutting hours worked. For the first time since the introduction of licencing laws, pubs have been opting to close on average two hours before they have to by law.

In this context, Starmer’s supposedly feel-good announcement sounds more like a threat… staying open until 1.00am will be about as welcome as finding half a worm in the apple you’ve been chewing. Indeed, if you are one of the remaining handful of people who wants to commemorate VE Day by consuming alcohol, you’re better off getting a few tins from the supermarket than hoping to find an open pub after 9.00pm… indeed, if Starmer and Reeves’ tax hikes do what many of us expect, finding an open pub on any night of the week is going to be a rare event in future. But by then, few of us will have the money to blow on booze anyway.