Business rates cut ‘won't be enough for pubs’

The government announced a 15 per cent cut in business rates for pubs and music venues in England.

It said rates would not increase for two years.

The move follows backlash against November’s Budget, with business rates increases putting the pressure on pubs.

Around the country some venues went so far as to ban Labour MPs.

Opposition parties have described the latest development as a U-turn while pubs and venues in the Wakefield district and around the country have questioned the impact the latest reduction will have.

Furthermore, restaurants, hotels and other hospitality businesses have been omitted from the changes.

Almost 50 Labour MPs wrote to Chancellor Rachel Reeves calling for the business rates increase for venues to be scrapped.

Ms Reeves said the government "listens when people raise concerns".

Jenny Burton, who owns restaurants Qubana, Robatary and Fino in Wakefield, said it was becoming ever harder for businesses to run and more are likely to close without backing.

She said: “While the government talks about supporting hospitality and retail, businesses like ours are being squeezed and left behind.

"Qubana has recently seen its business rates increase from £43,000 to £55,500, which has pushed us into a bracket that means we will not benefit from the latest relief at all—in fact, our bill will rise.

“This comes after Covid relief was withdrawn and while we are still repaying Bounce Back Loans, so the timing feels particularly unjust.

“This increase is completely out of step with the pressures restaurants are facing: rising wages, higher National Insurance, soaring energy costs, and supplier price increases.

"It highlights how disconnected these decisions are from the reality on the ground.

“Looking around Wakefield, it is hard to justify increasing rateable values when there are so many empty commercial properties in the city centre.

"Our rent has been £45,000 in line with the rateable value for five years, and increasing it simply isn’t feasible for a large building in a city struggling with its night-time economy and the cost-of-living crisis.

"Our rates should remain below the £50,000 threshold and be aligned with the rent payable.

"Other venues benefit from large outdoor spaces, car parks, and additional services—we don’t. We’re dealing with falling footfall in a less desirable location, so increasing our rateable value makes little sense.

“If things don’t change, city centres will continue to lose businesses because it is simply no longer affordable to operate.”

Alex McHale, who owns The Old Post Office in Pontefract, said the changes would not be enough.

He said: “My business rates payment has gone up just over 60 per cent before this reduction was introduced.

“Times are already hard. VAT is crippling, wages, utilities, National Insurance rises, the incoming National Living Wage rises.

"I've got to find an extra £300 a month just for business rates amongst everything else going up around me.

“What I can't understand is how this government fails to see that if we keep putting our prices up and up, people will become alienated and a night out completely unaffordable.

“And the absolute biggest kick in the teeth is that it’s just us. Hard working, independent businesses, often one man bands, who have put so much money into building something themselves from scratch.

“Personally, I put £150,000 into the build of my venue - and for what? To give all the money I make away to the government? Ludicrous."

Ossett Brewery, which owns pubs across West Yorkshire, welcomed the announcement but said it did not go far enough.

Owner Jamie Lawson said: “We are pleased with the Government’s decision to start listening to the challenges pubs face to ensure their survival.

"The business rate support is a helpful gesture but goes nowhere near far enough to help pubs continue in the face of so many rapidly rising costs.

"The steep curve of increases in minimum wage, national insurance, supplier increases and rates mean many pubs will be stretched too far this year.

"Pubs and bars rely disproportionately more than other sectors on part-time living wage employees, it’s the nature of the industry.

"Ossett Brewery fully embraces the idea of better pay and working conditions for its employees but the speed of increase in taxation is not sustainable.

"Since the November-24 budget the annual cost of running our pubs has increased by nearly £1m.

A Conservative Party spokesman said: “Labour have partially U-turned on plans to hike business rates for pubs. Hikes that would have forced many pubs to close their doors for good.

“But let’s be clear this is only a sticking plaster solution to a huge problem. A mere 6 per cent of retail, leisure and hospitality firms will benefit from the belated measures announced by Labour.

“Thousands of shops, cafés, hotels and small businesses are still staring down the barrel of impossible tax rises. And that's before they serve a single customer.”

Liberal Democrat Treasury Spokesperson Daisy Cooper noted that the change would do nothing to help other businesses.”

Treasury Minister Dan Tomlinson said: “This government does want to go further to support pubs. Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country.”

Emma McClarkin, chief executive of the British Beer and Pub Association, welcomed the move.

She said: “We are pleased the government has listened to our concerns, and those of publicans, consumers and MPs who rallied to defend our locals. This pub specific package will stave off the immediate financial threat posed by accelerating business costs and will help keep the doors open for many.

“This additional support will provide certainty for tens of thousands of pubs, with many seeing their bills frozen or falling and there will be a sigh of relief from landlords across the country.”