The government is about to make a momentous u-turn by announcing concessions on the steep business rates increases threatening pubs all over England. Equality Landlords and publicans have expressed their profound alarm at the economic impact of the calamity on their enterprises. In reaction to their universal loathing, this possible retreat is currently being floated. The Independent Valuation Office recently increased the estimated value of pub properties, which has led to rising business rates bills that many in the hospitality sector argue are unsustainable.
In November, the Chancellor reversed his remuneration, reducing business rate discounts for the hospitality sector from 75% to a paltry 40%. From April, pubs will face the removal of all business rates relief. This withdrawal will add incredible pressure to an industry that’s already struggling to stay alive. Pubs, venues, clubs, cinemas and more are already going through the toughest crisis they’ve ever experienced, even before these hikes loom on the horizon.
That’s why the backlash against the rate increases has been so pronounced. In unusual show of protest, more than 1,000 public houses have since banned Labour MPs from their establishments. This move is a sign of the growing frustration in the industry. It fights a losing battle to prove its longterm sustainability as operating expenses keep climbing.
Her fellow backbencher, Conservative MP Dame Caroline Dinenage wrote about her worry. She wrote to the Chancellor to explain the impact of these rate increases on her local venues. She stated, “Venues, clubs and cinemas up and down the country are already struggling for survival.” This sentiment rings true for many in the hospitality and leisure sectors, who feel that the government’s response simply doesn’t go far enough.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), provided the media with a more scathing take. She remarked, “This latest announcement looks like another sticking plaster on a broken system rather than the more fundamental reform required.” Dickinson’s statements underline the idea that a bigger, more holistic approach is needed to keep businesses experiencing cash flow problems in operation.
Jon Collins, chief executive of music venue body LIVE, emphasized that any government U-turn on business rates for pubs must extend support to live events and arenas. He stated, “If the government is preparing a U-turn on business rates for pubs, it must not leave live events and arenas behind.” His comments serve to reinforce the interdependence of these sectors and their joint appeal for resources.
Huw Edwards, chief executive of ukactive, went even further in his scaremongering. He continued that without a targeted support package on business rates for gyms, pools and leisure centres, communities would be left to suffer devastating impacts. He said, “Failure to provide a business rates support package to gyms, pools and leisure centres will lead to higher prices, reduced services, redundancies and in some cases the loss of gyms from our communities.”
Andrew Goodacre, chief executive of the National Independent Retailers Association showed support. He stressed that independent retailers are facing the same issues as pubs. These retailers have been really missed in some discussions about more assistance. He remarked, “Perhaps independent retailers need to follow the pubs’ example and start banning MPs from their premises too.” That’s what Goodacre’s comments really get at — they’re an emblem of the frustration brewing across every affected sector that’s been left behind by government policy.
It’s essential that these fears are addressed, which is what Rachel Reeves, shadow chancellor, attempted to do earlier on this week. “I want to support our pubs; I want to support our high streets. That’s why we made the change to the rates. I recognize that many paths are still struggling and we’re working with them,” she said. Reeves’ recognition that these struggles continue is a good sign that there’s a real willingness in government circles to confront these urgent challenges.
Conversations are ongoing as to what reforms can be enacted and what sort of support packages will look like for impacted industries. Now, hundreds of businesses are calling for more than just short-term relief. They are looking for a permanent change that will help them thrive in a new more dire economic reality.