Pubs throughout England are bracing themselves for huge hikes in their business rates. The government is set to announce a major backtrack on earlier plans for tax increases. Like many urban sectors, the hospitality industry has taken a particularly harsh beating during the pandemic. It has fought off existential threats, such as tax reform and the ever-increasing cost of doing business. In his November Budget, the Chancellor announced cuts to business rate discounts, reducing them from 75% to 40%, with no business rate discounts at all likely from April 2024.
Rachel Reeves, the Shadow Chancellor, highlighted that the government has made cuts to the tax rate for pubs and the hospitality industry. The Independent Valuation Office increased property valuations, which further economically burdened these establishments.
The government is to announce a final decision in the coming weeks. Details on this announcement should do much to reassure worried pub landlords, who are known to have successfully campaigned against these planned increases. More than 1,000 grassroots pubs have pledged to refuse entry to Labour MPs. This dramatic step underscores their frustration at what they term a financial betrayal.
“Venues, clubs and cinemas up and down the country are already struggling for survival,” stated Conservative MP Dame Caroline Dinenage. Her comments speak to a greater sentiment shared all across the country, as impact and appropriations on-the-ground for this entertainment venue remain dire.
Jon Collins, chief executive of LIVE, emphasized that if the government is indeed contemplating a U-turn on business rates for pubs, it should not overlook live events and arenas. He further recommended that any developments be open and accessible to all industries impacted by these transitions.
“If the government is preparing a U-turn on business rates for pubs, it must not leave live events and arenas behind.” – Jon Collins
According to ukactive chief executive Huw Edwards, similar statements apply to leisure facilities. Otherwise, they will face their wrath when prices go through the roof,” he cautioned. This absence of support would further lead to more limited offerings in health clubs and leisure facilities.
“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.” – Huw Edwards
The challenges facing the hospitality sector are felt nationwide across industries. Andrew Goodacre, chief executive of an organization representing independent retailers, highlighted that they face similar challenges yet remain excluded from discussions about additional support. His statement is, apparently, an invitation for more unity between companies caught in such awkward, difficult situations.
“Perhaps independent retailers need to follow the pubs’ example and start banning MPs from their premises too.” – Andrew Goodacre
Goodacre further noted that independent retailers “face exactly the same challenges as pubs but have been left out of discussions about additional support.”
Helen Dickinson, chief executive of the British Retail Consortium (BRC), was deeply critical of the government’s approach. She criticized that recent announcements still appear to be band aids rather than addressing the root causes of these systemic issues.
“This latest announcement looks like another sticking plaster on a broken system rather than the more fundamental reform required.” – Helen Dickinson
In doing so, Reeves recognized the struggles that all sectors are still dealing with today. She is passionate about defending pubs and high streets. At the same time, her team deeply engages with automobile, energy and other industries to assess how changes in policy can impact planning and licensing to drive alternative technologies forward.
“I want to support our pubs; I want to support our high streets. That’s why we made the change to the rates. But I recognise that many paths are still struggling and we’re working with them.” – Rachel Reeves
Negotiations continue behind the scenes at the federal level. For many businesses — particularly those in the hospitality high street and development sector — it’s an active definitive relief and waiting on complete confirmation. The upcoming special announcement on business rates will be even more consequential for pubs and venues all over England. They will have to innovate as they navigate these tough economic times.