Failure to address business rates reform will ‘anger’ sector

By Gary Lloyd

- Last updated on GMT

Calls ignored: business rates were not mentioned in the Spring Budget (Credit:Getty/mammuth)
Calls ignored: business rates were not mentioned in the Spring Budget (Credit:Getty/mammuth)

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Despite industry-wide calls for reformation to business rates, the Conservative Party’s Spring Budget failed to offer anything new to the under-pressure on-trade, which would “frustrate and anger” the sector.

There was some encouragement to pubs with Chancellor of the Exchequer Jeremy Hunt’s announcement on duty for draught products to be up to 11p lower than in supermarkets​ but no other help.

After Hunt’s presentation on Wednesday (15 March), Night-Time Economy Adviser for Greater Manchester Sacha Lord said: “In the face of rising bills, business rates and inflation, operators urgently need ongoing support and the Chancellor's announcements, or lack of them, will only further frustrate and anger the industry.”

Meanwhile, the British Beer & Pub Association was hopeful of working on business rates with the Government. 

Importance of pubs

Chief executive Emma McClarkin said: “Having recognised the importance of our pubs and brewers, we look forward to working with the Government to resolve the fundamental issues holding our pubs and breweries back, including reforming business rates and reducing the unfair tax burden on our sector.”

Last week, an open letter​ signed by hundreds of hospitality businesses encouraged Hunt to action reformation many aspects of the sector including business rates.

A similar stance​ was taken by the Night Time Industries Association shortly before the Budget was announced.

Although business rates were ignored, in his Autumn Statement in November last year, Hunt announced a £13.6bn package to extend business rates support​ for small and medium-sized enterprises (SMEs), which would include freezing the business rates multiplier for another year (2023-24) in a bid to protect businesses from inflation.

Difference between continuing and closing

The Campaign for Real Ale (CAMRA) voiced its disappointment in Hunt’s speech. Chairman Nik Antona said: “It is bitterly disappointing not to see the extension of help for pubs and breweries with the burden of business rates.

“With current support schemes due to end in 2024, these rates bills can be the difference between continuing to trade or having to close for good.

“The Government urgently needs to reform the whole business rates system to fix the issues with this unfair system and help to protect our pubs.”  

The freeze will continue to keep the small business multiplier and standard multiplier at 49.9p and 51.2p respectively, rather than rising to 52.9p and 54.2p, saving ratepayers £9.3bn over the next five years.

The support package that will end in April saw an increase from 50% support with rates for businesses up to 75% or £110,000 per company.

The Chancellor also stated in November, the Government would proceed with the revaluation of business properties from April 2023 and would implement a £1.6bn scheme to cap bill increases for those who could see higher bills as a result.

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