MPs call for reform of business rates system

By Emily Hawkins contact

- Last updated on GMT

Call for reform: St Albans' MP Anne Main shared the concerns of pubs like the city's Six Bells
Call for reform: St Albans' MP Anne Main shared the concerns of pubs like the city's Six Bells

Related tags: Business rates

St Albans’ MP Anne Main led the way in challenging the Government to reform the business rates system in a debate on the closure of Britain’s pubs in Parliament.

Chancellor Philip Hammond announced a cut of 33% in rates​ for businesses with a rateable value of under £51,000 in his Autumn Budget.

However, Main told fellow politicians that because of high property values in her constituency​, this reduction was not applicable to many St Albans’ pubs.

Thirty of the 50 pubs in the city have seen a rates increase - which means they will need to sell around 180,000 more pints per year to cover the cost.

She echoed calls made by trade bodies, including the Campaign for Real Ale (CAMRA), the British Beer & Pub Association (BBPA), and UKHospitality (UKH), for a full reform of the rates system.

'Unfair penalisation'

Main said: “The current system is not fit for purpose and a review is needed to tackle the unfair penalisation of property-based businesses like pubs, especially given the vastly reduced levels of taxation paid by online retailers.”

The MP mentioned the Six Bells pub, which saw its rates valuation increase from £30,000 to £62,000, putting it over the threshold for the Chancellor’s recent reduction of one third.

Licensee Alan Oliver explained to The Morning Advertiser ​(MA​):​ “The threshold helps 90% of pubs in the country, but not here.

"The system is taking the bottom line profit out of businesses in St Albans.”

He added: “At the moment it has not affected us, because of staggered increases. We already have to start planning. If we don't get a reform then a lot of  the pubs are going to really struggle to make ends meet.”

CAMRA chief executive Tom Stainer praised MPs for uniting to call for fundamental reform:

“I’d urge the Government to listen carefully to unified calls from backbenchers and from the pub industry to safeguard the long term future of the Great British Pub,” he said.

Financial secretary to the Treasury Mel Stride told the Commons: “Pubs lie at the heart of our local communities and the Government’s view is that we should do whatever we ​can to assist and support them.

He said the Government’s rates reduction would be worth around £900m to the sector over the next two years.

Stride thanked Main for raising the issue and said she had “once again ensured that it is very much at the forefront of the Government’s agenda”.

Fairer system sought

Main told MA​: “We must find a fairer system that seeks to help all pubs, including those in high-value retail areas like St Albans.

“I hope the minister will have taken on board the points made during the debate and he comes to visit some of the many wonderful pubs in St Albans and listen to their concerns and the pressure business rate increases have added to their businesses.”

Brigid Simmonds, chief executive of the BBPA, said that while the reduction signalled “great news for most pubs”, the rates system was “obsolete”.

“The Valuation Office Agency's Pub Valuation Guide​ makes clear that business rates for pubs should be based on the turnover that a reasonably efficient operator can achieve.

“Far too often, however, experienced operators and pubs that have recently received investment are overpaying.

She continued: “We are now engaged with the VOA to improve the current guide ahead of the next revaluation, but critically, a permanent reduction in the overall share of the business rates burden for the pub sector is needed."

UKH chief executive Kate Nicholls agreed that the sector was “still short of the wholesale reform we need, rather than plugging holes for a small proportion of the sector”.

“The reality is, that without proper root-and-branch reform of the system and a rethink of how the sector is taxed, pubs will continue to close,” she added.

Related topics: Legislation

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