Government to reduce business rates rise for pubs

Pubs’ business rate bills are to be slashed in the upcoming rise.  An announcement is due to be made by the government in England in the next few days.

The government is expected to say it will make changes to the way pubs calculate business rates, resulting in lower increases in bills.

Treasury officials say they have recognised the financial difficulties facing many pubs following a sharp rise in premises pricing.

The move follows pressure from landlords and industry groups, including more than 1,000 pubs which have banned Labour MPs from their premises.

The BBC understands this will only apply to pubs, not the entire hospitality sector.

It is believed the Treasury is also prepared to relax licensing rules to allow longer opening hours and more footpath areas for drinking.

In her November Budget, Chancellor Rachel Reeves cut the business rates discount in place since the pandemic from 75% to 40% and announced there would be no discount from April.

That big upward adjustment to the rateable values ​​of pub premises left landlords facing the prospect of much higher rates bills.

The campaign to reduce the impact of these rises has been gaining momentum recently, with pub owners and industry groups lobbying for more support.

DWP minister Dame Diana Johnson said talks between the government and the hospitality sector were “ongoing.”.

Speaking to Radio 4’s PM programme, he said, “As a government we want to make business rates fair, but you will also know that we are coming to the end of the transitional relief that was available because of Covid.”

Labour MPs on Wednesday called on the government to reconsider its support for the industry.

Conservative leader Kemi Badenoch said, “What happened is that over Christmas, Labour MPs were banned from every pub they tried to go to… so now they are insisting on a U-turn.”

“Cut business rates for all of the high streets, not just pubs.”

He said the Conservatives had a “much better plan,” which would have “cut business rates for all of the high streets, not just pubs.” He said business rates bills of less than £110,000 would be abolished entirely.

Reform also welcomed the decline, saying, “Pubs are already burdened with huge energy costs.”

Richard Tice, the party’s deputy leader, said, “Pubs are the backbone of our communities and a huge part of British heritage. Their closure would be an economic as well as a cultural disaster.”

To calculate a pub’s business rates bill, the rateable value of its premises is multiplied by a set figure: the “multiplier”.

The government has already reduced the multiplier for pubs and may cut it again.

Alternatively, they could boost a £4.3 billion “transitional relief” fund brought in to cushion the impact of withdrawal of support after the pandemic.

Geoff Robbins, who owns the Wheatsheaf pub in Farringdon, Oxfordshire, with his wife Jo, said it was a “huge relief” that more help was on the way.

Their rates are set to increase by nearly 80% over the next three years. He believes that after factoring in higher gas, electricity and staffing costs, he needs a discount on most of these.

Geoff, who contacted BBC Your Voice, said, “Rates are a tax against your business, whether you make a profit or a loss… you have to pay; there’s no way around it.”

Industry groups also welcomed the news that additional help would be available.

Emma McCarkin, chief executive of the British Beer & Pub Association, said it was “potentially a huge win” for the sector.

“This can save local people and jobs, and the public can heave a sigh of relief,” he said.

Kate Nicholls, chair of UK Hospitality, which represents the industry, said the support should not just apply to pubs but to all hospitality businesses affected by rising rates, including cafes and restaurants.

“We need a hospitality-wide solution, which is why the government should implement the maximum possible 20p discount in the multiplier for all hospitality properties,” he said.

Other sectors are calling for support to be expanded even further, including live music venues, theatres, galleries, gyms and retailers.

The cancellation of the recent budget will be seen by many as another U-turn following cuts to the winter fuel payment, disability benefits and inheritance tax on farms and family businesses.

Shadow Business and Trade Secretary Andrew Griffiths said the changes showed Rachel Reeves’ budget is “falling apart”.

“Workers were wrong to strike the pub and now they have been forced to make another terrifying U-turn,” he said.

Liberal Democrat Treasury spokeswoman Daisy Cooper said, “This is literally the last chance saloon for our treasured pubs and high streets – so the Government must make a U-turn today.

“These businesses are concerned, making decisions now, and cannot wait another minute longer.”

The calculation of business rates is an issue that spans all four countries of the UK.

The rates discount during the pandemic only applies to hospitality businesses in England.

Scottish businesses are awaiting the budget there next week to see how the Edinburgh government will approach the issue.

Pubs there will be hoping the Scottish Government will follow the UK Government in offering some relief.