On Wednesday, our new Chancellor Rachel Reeves, the UK’s first-ever city region leader, went on BBC Breakfast. She welcomed the growing concern about the impact of business rates on pubs. She hinted that there was some resistance to providing more comprehensive support for the whole hospitality industry. She left the door open to offer help targeted at pubs experiencing the highest rate hikes.
The Chancellor expressed particular concern about the upcoming changes in business rates, stating, “I think that people can see that the biggest impact and the biggest concern right now is around pubs.” Her comments come as Britain’s hospitality sector braces for an end to Covid-era business rates relief from April. This assistance has been a lifeline in these unprecedented times.
Through extension of previous measures to control business rates Treasury has promised caps on increases in rate liability over the next three years of £4.3 billion. These caps are intended to make the transition a little less harsh. Certainly, establishments that were affected will still experience large increases. Pubs are already facing a crippling 76% increase in their rate bills. Conversely, hotel owners might face staggering increases as high as 115% over the same period.
Reeves also stressed the need for government to ensure support is balanced across the hospitality sector. “As that transitional relief comes to an end, although we’ve put in £4.3bn over the next three years, we need to make sure that we do that in a balanced way that particularly supports our pubs and the hospitality sector,” she stated.
The industry is excitedly preparing for these changes. At the same time, businesses are raising alarm bells about their capacity to manage increased rates when the relief expires. The imminent revaluation of sites has been raising operators’ stress levels further. Or, they are scared because they do not have the capacity to meet these financial requirements.
Kate Nicholls, Chief Executive of Hospitality UK, said there were grounds for cautious optimism in Reeves’ remarks. She noted the appealing nature of the pub experience and underscored the need for systemic support. In addition, she’s thrilled to see acknowledgment for other hospitality sectors hit just as hard, if not harder. “It’s good to see recognition of wider hospitality and that she is talking about support beyond pubs,” Nicholls remarked.
The government is currently looking at what more assistance they can provide to pubs. This judgement comes at a crucial time for debate about how to address the financial burdens imposed by increasing business rates. With the April deadline approaching, all sides in the hospitality sector are hoping for more definitive direction. Most importantly, they want to know what support options are available to them.