The government is poised to announce a significant reversal regarding the increases in business rates bills faced by pubs across England. This possible backtrack comes after a storm of outside pressure from www. …concerns from pub owners, landlords and industry advocates about whether their businesses could continue to function in the face of rising costs.
In the November Budget, the provost of the Duchy of Lancaster reduced business rate reliefs for pubs and hospitality establishments. In their case, they went from 75% to 40%. By April, they will be completely eliminated—a zero percent discount. Hardly surprising, then, that many in this space think this decision poses an existential threat to the business model of these enterprises. Helen Dickinson, BRC chief executive, underlined that these initiatives should be bigger and bolder. Yet she pointed out that as it stands, the proposed changes go beyond what’s necessary to provide a sustainable fix.
Dame Caroline Dinenage, Conservative MP for Gosport, drew members’ attention to the awful plight of theatres, music clubs and independent cinemas up and down the country. In a letter to the Chancellor, she urged for additional support for these struggling entities, stating, “Venues, clubs and cinemas up and down the country are already struggling for survival.”
Additionally, the Independent Valuation Office has just ruled that property values for pubs and hospitality are increasing. This decision has raised alarm bells for industry stakeholders. Many have condemned the upcoming business rates increases, arguing that they will force businesses to close and result in job losses. Andrew Goodacre, the chief executive of the Association of Convenience Stores, which represents independent retailers, put forth an incendiary idea. He suggested that independent retailers could learn from some pubs and apply a permanent exclusion order on offending MPs.
Jon Collins, chief executive of the music venues’ umbrella body LIVE, was keen on the same theme. He stated, “If the government is preparing a U-turn on business rates for pubs, it must not leave live events and arenas behind.” This sentiment points to the bigger picture of how business rates policy affects everyone, not just publicans.
This has led Huw Edwards, the chief executive of ukactive, to warn of a looming crisis. He cautioned that gyms and leisure centres will be at risk without equivalent support. “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,” he warned.
Rachel Reeves, shadow chancellor, admitted the sudden turn of events had created new challenges. “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 stated. Reeves emphasized that her team is taking an inclusive, serious approach to engaging the sector. They are learning what different planning and licensing policies mean on the ground.
Even with all of these positive conversations, Dickinson was still skeptical on what the federal government is doing. She remarked, “This latest announcement looks like another sticking plaster on a broken system rather than the more fundamental reform required.” She called for transparency from the Treasury explaining how they arrived at these changes. Moreover, she highlighted the growing need for clarity of the other support that has been committed by the PM as an alternative.
The continued debate about business rates is symbolic of the plight many in the hospitality industry currently find themselves in. Over 1,000 pubs have prohibited Labour MPs from entering their establishment in an act of rebellion against the rate increases. This action is a direct indication of the intense frustration felt by those impacted. For some of these pressures, the government’s upcoming announcement should provide welcome relief. Or it might just make the already difficult environment for businesses that rely on public goodwill even worse.