Following an open letter sent to the Government by the Society of Independent Brewers & Associates (SIBA) that claimed the promised business rates reform will cost pubs 76% more than before, both Richard Naisby of Milton Brewery in Cambridge and Anthony Hughes of Nottingham-based Lincoln Green have had their say.
Naisby, who operates four pubs in Cambridge and Histon, admitted: “As reality dawned that this was a terrible Budget for our industry, I became angry and not a little scared. We are used to half-truths but this seems like one dirty great lie.”
The Milton brewery founder said the rise in valuation and the lower multiplier on business rates cancel each other out at its brewing site but its pubs are “all affected badly at a time when we are ill-equipped to deal with shocks like this”.
He added last year’s employer national insurance contributions and national living wage hikes are still hurting the business and it was looking forward to some relief in the promised reduction in national non-domestic rates.
Asked to fund more
Lincoln Green founder Anthony Hughes – who runs six pubs in Nottinghamshire and Derbyshire – said the Budget was like being given something with one hand while the other hand takes it away.
“Any ‘relief’ implied by the reduced retail, hospitality and leisure (RHL) multiplier was completely wiped out by the increase in rateable value,” Hughes said. “If the net effect is that businesses are paying more, it’s hard to accept the narrative on gov.uk that this is a major support package. From where I’m standing, we’re once again being asked to fund more, not given meaningful relief.”
On how business rates will affect the day-to-day operations at Lincoln Green, Hughes said it is a big fixed cost, regardless of how trade is actually going, and the current method of calculating pub rateable values “actually penalises success”.
He continued: “We’ve taken many pubs on that were failing, breathed new life into them, created new jobs and raised more VAT receipts only to be punished with a massive hike in rateable value.”
Naisby argued: “In the free trade, some of our customers are looking at frankly ridiculous increases in business rates. More than 300% in one case and a valuation increase of £94,000 in another. There will be transitional relief but clearly this is totally unsustainable.”
Spending billions claim
He added one contact has already opted to not to renew his lease next year and has handed the property keys back, which is a decision “entirely prompted by the prospect of the pub having no profitable future with business rates at the announced rates”.
On what the industry needs in the future, Hughes explained: “We need honesty and a system that produces lower bills in reality, not just on paper. If Government says it’s spending billions on support, the test should be simple: are pubs paying less overall? If not, something isn’t working. Longer-term, we need genuine reform so physical, community-based businesses like pubs aren’t penalised year after year.”
Naisby concluded: “Our biggest ask would be to pull on the brakes now. Halt the announced changes. Pause for a year at the 2025 rates and come back in the spring with a proper, considered package of reform for pub business rates, scrapping the ‘fair maintainable trade’ model for good and give the sector chance to invest in the future.
“We raise enormous sums of taxation for the Government, across rates, duty, VAT and employment taxes. Without a break, this Budget risks killing the goose that laid the golden egg and putting thousands on the dole.”
Hughes summed up: “It’s like telling a customer: ‘that pint was £4.50 last week. I was going to make it £10, but I’m only charging you £6 – so I’ve saved you £4. That’s what this ‘support’ feels like when rateable values jump and wipe out the relief.”
