Note: Rachel Reeves (pictured) has been warned that pubs and other venues will close if the Budget does not address concerns over business rates, alcohol tax and workers' rights
Rachel Reeves has been warned that pubs and other venues will close if the Budget does not address concerns about business rates, alcohol tax and workers' rights.
As she considers her options, the Chancellor has been urged by hospitality bosses not to hit the sector as it recovers from shocks including the pandemic and rising energy prices.
Preventing an almost £1 billion rise in business rates next April should be at the top of the to-do list on October 30, according to a high-profile jobs adviser and the bosses of UK Hospitality and Greene King.
Sacha Lord, chairman of the Night Time Industries Association, which represents hundreds of pubs, nightclubs and bars, pushed for an immediate extension of business rate cuts.
“Without this, landlords will face unsustainable cost increases, many of them over £30,000, which is simply unsustainable,” said Lord, an adviser to Labor mayor Andy Burnham.
If the rate of closures continues, unemployment will skyrocket and the UK's status as a cultural tourism destination will be “taken over by other cities around the world,” Lord added.
Business rates are a local charge based on the value of the commercial property, meaning shops pay a higher amount compared to online giants such as Amazon.
The relief has seen hospitality businesses cut their bills by 75 per cent, up to a maximum of £110,000 per business.
During the 2020-2022 pandemic, the relief was 100%, and the following year it was 50%. It was then extended until 2025.
However, the relief will end on March 31, leaving hospitality businesses with an additional bill of £928 million.
“The dangers of inaction are enormous, whether you run a pub, a seaside hotel or a children's and family play centre,” added Kate Nicholls, head of UK Hospitality, which has 750 members.
Greene King chief executive Nick Mackenzie said: “We are calling on the government to start delivering on its promise to reform full rates to create a system that does not unfairly burden hospitality.”
Landlords will see unsustainable cost increases, many of which will be over £30,000
Sacha Lord, advisor to the Mayor of Greater Manchester Andy Burnham
Labor pledged reforms and said the system “discourages investment, creates uncertainty and places undue burden on our high streets”.
In his manifesto he promised to change business rates to make the system fairer.
However, entrepreneurs fear that in the face of plant closures, the reforms will be too little, too late. High Street employers want a fixed, lower rate.
Bosses are also concerned about the government's plans for workers' rights. Some argue that introducing rights such as sick pay from day one could harm jobs and economic growth.
This week, 80 brewers and pub bosses, including Greene King and Heineken, urged Reeves not to raise taxes on alcohol. Pubs would have to raise prices, resulting in loss of custom, closures and job losses, says the British Beer and Pub Association.
She called on ministers to freeze customs duties on beer next year and gradually reduce customs duties.
“Thousands of pubs and breweries across the country have nothing left to offer,” it said.
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