Ministers and MPs are out there, briefing all who’ll listen about the wonderful job they’ve done on “reforming” business rates, and “supporting the hospitality sector”.
But if this is what support looks like, I’d hate to see the opposite.
Let’s be brutally honest about this - there’s a stream of outrageous lies coming out of this Government right now - and I’m not talking about Rachel Reeves chess claims either.
Following the Budget, the Chancellor claimed she was “supporting” pubs and bars by delivering the “lowest taxes since 1991”.
She thinks she’s achieved this by removing a 40% discount on business rates, and applying a permanent reduction of 5p (although actually 4p for some) to the multiplier.
She also made this bald-faced statement knowing full well that as the headlines were being rushed out, the VOA was quietly releasing its revaluation data for hospitality, which has left operators facing, on average, a 76% hike in their business rates bills.
But, wait, don’t worry, the Government is “supporting” (again that word) with transitional relief to soften the blow of those rises (although why we need the blow softened when the chancellor has claimed to deliver the lowest taxes ever is a mystery…).
So operators, rather than facing that average 76% increase all in one pop, will find it being staggered over the next three years - just in time for the next hike in revaluations to land! So generous.
Let’s be clear - this is not support, this is the Government trying to mask the horror of what’s about to hit a sector that they’ve already hammered to the brink of extinction with the last round of tax hikes.
Backing hospitality...
For Treasury Minister Dan Tomlinson to write in The Mirror that they “back Britain’s brilliant hospitality industry” and that they’re “reforming business rates for the long term” is rubbing salt in the wounds.
Reform of business rates needed to be root and branch, and focused heavily on the criminal way businesses are valued by the VOA, which lacks rigour, scrutiny or science. Tinkering around the edges then claiming job done is not reform.
They have reformed nothing - they’ve replaced a reasonable discount with a pathetic one - in itself only giving a quarter of the 20p discount that was dangled to a desperate sector.
The Government actions are akin to a punter walking into a pub and being charged £20 for a pint, but then the licensee saying, “but don’t worry, I’ve given you a penny off that pint”.
A discount off a sickening increase is still a sickening increase.
And to continue to try and present this as anything other than yet another tax hike for a sector on the brink of an extinction event, is deceitful, dishonest and utterly appalling.
Costs rising through the roof
In his Mirror propaganda puff piece, Tomlinson claims the Government has restricted rises to 4 to 5% for most pubs (not sure where his 4% claim comes from, but with this Government, expecting a firm grasp on figures is pointless), yet the large majority of pubs will find rises capped at 15% and that will mean an average rise of £1,400 per pub, according to UKHospitality figures, with it rising the following year to £4,500 and the third year of “support” seeing pubs on average paying £7,000.
And these are average figures, many will be far higher, increasing pressure on an industry that was crying out for a tax break, not a further burden.
And I haven’t even mentioned the cost increases the rise in minimum wage has placed - one operator told me that had added £15,000 to his costs, while another estimated a further £23,000 of cost. So what to do, suck it up, pass it on, or start sacking…?
The Government has presented this business rates reform as a rebalancing of business rates between the high street and the online world. Yet while some hotels and pubs are facing valuation increases of north of 300%, the average increase for an online warehouse delivery hub is about 16%.
In fact I’ve seen one example of such a warehouse having a fall in its business rates. Balance eh?
Broken promises
Yet the Government continues to march forward with its lies, failing to recognise they have fundamentally broken their own manifesto pledges.
Pre-election, Labour said: “The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets…” (oddly enough, pretty much everything this Government has done since coming to power).
The manifesto went on: “In England, Labour will replace the business rates system, so we can raise the same revenue in a fairer way. The new system will level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship”.
So, based on their own promises, they’ve not only failed to deliver, they’ve done the exact opposite and are continuing to lie to us to try and cover the fact.
This cannot be allowed to stand.
As an industry we need to demand a complete u-turn on this act of criminal damage and industrial sabotage, as if nothing changes, there won’t be a hospitality sector left for this deceitful Government to tax.
