Chancellor Philip Hammond took steps to ease the financial burden on pubs in his 2017 Spring Budget by pledging £25m to fund a £1,000 business rates discount for 90% of pubs – a measure that was extended until March 2019 in the Autumn Budget of that year.
However, according to real estate advisor Altus Group, while 24,375 pubs were eligible for Hammond’s £1,000 discount by virtue of having a rateable value of less than £100,000, only 17,707 received it during its first year.
This is a result of European Union rules restricting state aid to €200,000 (approx. £175,850) per business over three years meaning that pubs that are part of a chain were the most likely to have missed out.
The loss of the £1,000 discount, combined with increases and inflation, creating a ‘triple whammy’ of extra costs for pubs, would see the average business rates bill of a pub rise 9.4% from £16,651 for 2018/19 to £18,220 from next April according to Altus Group.
Altus Group vice-president David Shuttleworth commented: "This month’s Budget is a great opportunity for the Chancellor to back business given the uncertain times that we face through Brexit, particularly, for those in the hospitality industry.
“An unprecedented stimulus of freezing inflationary rate rises in April 2019 would benefit not only all pubs, but all businesses across the hospitality sector, while extending the pub discount by 50% to £1,500 would be a minimal cost funded largely by the underspend on the discount during the previous two years.”
Simon Emeny, chief executive of Fuller’s, commented: “While the Chancellor’s £1,000 pub discount has helped a number of independent pubs – Fuller’s, and other pub companies, are unable to take full advantage of it for eligible managed pubs.
"We’ve long called for a root and branch review on business rates and for the Government to implement a regime that is fit for today’s digital world. It’s time to stop taking the sticking plaster approach and instead completely overhaul this antiquated system.”
The announcement follows analysis of Government data on pub closures by Altus Group which revealed that 33 pubs a week between 1 April and 30 September 2018 have either been demolished or converted into other types of use such as homes and offices - increasing from 25 per week the previous year.
The call for an extended and increased pub discount follows the sending of a letter to the Chancellor by UKHospitality and a coalition of leading hospitality businesses requesting targeted support in the Autumn Budget on 29 October.