The government has announced a 20% cut in business rates for eligible pubs, clubs and live music venues in England from April 2027. Nearly 32,000 venues are expected to benefit, with the typical pub saving around £1,100 in the following financial year [1].
The immediate argument is economic. Pubs are struggling with energy costs, staffing, tax and changing consumer habits. Relief may help some remain open.
But there is a more interesting reason to protect them.
A pub is not simply a retail outlet for alcohol. It is one of the few remaining places where people can arrive without a formal invitation, stay without a fixed agenda, and speak to people they may not otherwise meet. It sits between home and work, private life and public life.
As more of our shopping, entertainment, work and communication move online, these places become more valuable, not less. Digital contact is useful, but it does not fully reproduce the experience of being in a room with other people. Sociability needs somewhere to happen.
Recent research by Oxford Economics, commissioned by AB InBev, estimated that pubs and bars support $50.5 billion in UK economic activity and 820,000 jobs. Among UK customers surveyed, 80% regarded their local pubs and bars as important shared community assets, while 78% said they visited to socialise with friends or family [2].
The commercial source of that research should be kept in mind. Nevertheless, its central observation is difficult to dispute. Pubs create value that is not fully captured by the price of the drinks they sell.
Alcohol has historically been central to this because it performs a genuine social function. It reduces inhibition, lowers tension and can make conversation easier. One of its earliest effects is through GABA, the brain’s main inhibitory system, which helps regulate anxiety, relaxation and social ease.
This is why alcohol has remained so resilient across cultures. It does something people value.
The difficulty is that it achieves that effect rather imprecisely. Alcohol does not stop when someone feels pleasantly relaxed or more open. It continues to affect judgement, coordination, mood, memory, sleep and health. The desired social effect may be relatively narrow; the biological footprint is much wider.
That creates a tension in how we think about pubs. Public health discussions often focus on reducing drinking, while hospitality policy focuses on keeping venues open. These should not be treated as opposing goals.
We can protect the pub without insisting that alcohol remain the only meaningful way to participate in it.
The drinks market has already changed. More people want to moderate, alternate or avoid alcohol on particular occasions. But removing alcohol is only one part of the challenge. Many people still want a drink to provide ritual, flavour, relaxation or a sense of occasion. A sweet soft drink or a glass of water may serve hydration, but it does not necessarily meet the same social need.
This is where functional social drinks become interesting. The scientific opportunity is to understand what people seek from alcohol and develop more precise ways of supporting those states, without carrying forward so many of its unwanted effects.
The healthier future of the pub will not come from making it less social. It will come from preserving the room, the ritual and the pleasure of gathering, while giving people more choice over what they drink and how they want to feel.
Business-rates relief may help keep the doors open. The next task is to make sure everyone feels they have a reason to walk through them.
—Professor David Nutt
References
[1] Crerar, P. “Business rates to be cut by 20% for pubs, clubs and music venues in England.” The Guardian, 23 July 2026.
[2] Oxford Economics. Cheers to Bars: The Economic and Social Contribution of Bars and Pubs. Research commissioned by AB InBev, 2026.
