The hospitality industry in England is under siege from proposed voracious cuts to business rates. Pubs and venues are especially vulnerable, as these changes would put them out of business. Following the November Budget, Chancellor Rachel Reeves announced a reduction in the business rate discount for pubs from 75% to 40%, with no discounts available starting in April. However, the Independent Valuation Office has increased rental values for pubs and hospitality businesses. In answer, industry executives are raising alarms about the survival of these enterprises.
Jon Collins, chief executive of LIVE, made the point that it must not only be the government’s support for pubs. 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 simple comment reveals deeper ramifications of the amendments. They affect much more than just bars, killing every live event venue that relies on a walk-in customer base.
Dame Caroline Dinenage, who has actively engaged with the Chancellor regarding the plight of struggling venues, clubs, and cinemas, echoed these sentiments. She remarked that “venues, clubs and cinemas up and down the country are already struggling for survival.” Her statement touches on large sector concern that the updated business rates structure will increase financial hardships for these sectors.
Huw Edwards, chief executive of ukactive, warned that failing to provide a business rates support package could lead to negative consequences for gyms, pools, and leisure centers. He asserted that “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.” His remarks further reiterate how all sectors are connected and experiencing the same impacts from fiscal policy changes.
The Bermondsey Beer Mile has probably seen some of the fiercest reaction from landlords and pub-owners against these upcoming increases. Some local pubs even resorted to extreme measures. According to reports, more than 1,000 of them have forbidden Labour MPs from entering their premises in retaliation for the government’s actions. That’s not all, Andrew Goodacre, chief executive of an organization representing independent retailers, floated the idea that maybe indy retailers need to start doing that too. He stated, “Perhaps independent retailers need to follow the pubs’ example and start banning MPs from their premises too.”
Industry leaders have roundly condemned the government’s response as insufficient. Helen Dickinson, chief executive of the British Retail Consortium (BRC), described the recent announcement as “another sticking plaster on a broken system rather than the more fundamental reform required.” Her comments are indicative of a desire for more sweeping reform rather than stopgap measures.
The government are expected to make more announcements soon about possible business rates climbs down on pub bills. Rachel Reeves does seem to have signaled her willingness to exert meaningful pressure on the hospitality sector, while recognizing the dire straits that many businesses still find themselves in. She stated, “I want to support our pubs; I want to support our high streets. That’s why we made the change to the rates. I recognise that many paths are still struggling and we’re working with them.”
Even with such reassurances, lobbyists on behalf of the industry aren’t buying it. The Treasury has been called upon to provide transparency on how these modifications came to be determined. Dickinson remarked, “The Treasury needs to be open about how it decided on the changes, while the sector desperately needs more details on the alternative support promised by the Prime Minister.” This call for transparency is not just an isolated demand.
Debate around business rates has reached a boiling point. These amendments will make a huge difference to pubs, venues and cinemas, not just in London, but right across England. Industry advocates are urging Congress to provide a more equitable framework. They want it to be supportive in nature while addressing the distinct challenges that each sector faces.