The sector has broadly welcomed the government’s decision yesterday (27 January) to provide emergency business rates relief for pubs, while warning that the measures fall short of the permanent, sector-wide reform needed to address rising costs.
The package includes a 15% cut to new business rates bills from April, followed by a two-year real terms freeze, alongside a review into how pubs are valued for business rates.
While many said the announcement would provide short term respite, industry leaders cautioned that it does not fix what they described as a broken system.
Pubcos:
Star Pubs
Lawson Mountstevens, managing director of Star Pubs, said the measures would ease immediate concerns for licensees.
“Although we will need to fully digest the detail, this announcement is a huge boost for pubs and will ease the immediate concerns of publicans up and down the country,” he said. “I am pleased that the Chancellor has clearly listened to the many Star Pubs licensees who expressed their objections to the plans published at the Budget.
“This support is a welcome acknowledgement of the pub as the cornerstone of British society, and we are committed to working with the Treasury in the coming weeks and months. This support means publicans and their staff are able to focus on the day job – running great pubs at the hearts of their communities.”
Ardent Pub Group
In contrast, Dom Jacobs, founder and managing director of Ardent Pub Group, said the announcement failed to address the scale of the challenge facing hospitality.
“Rachel Reeves’ latest U-turn may be welcome, but it is wholly inadequate,” he said. “Hospitality continues to shoulder an excessive tax burden, and this half-measure does nothing to change that.
“Instead of backing a sector capable of delivering real growth and jobs, the government has once again missed the mark, a failure that will inevitably push many brilliant publicans out of business. That would be nothing short of a tragedy.”
Punch Pubs & Co
Andy Spencer, chief executive of Punch Pubs & Co, welcomed the intervention but stressed that further reform is needed.
“We welcome the Government’s decision to address the proposed rise in business rates for pubs with a specific support package, and it is right that the strength of feeling across the sector has been recognised,” he said. “Our pubs are at the heart of communities up and down the country, delivering significant socio-economic value; yet for too long they have shouldered a disproportionate and deeply unfair tax burden that has threatened their long-term sustainability.
“Today’s announcement is a necessary correction, not a solution, and we will continue to work with the Government, alongside our trade associations, in order to achieve meaningful, long-term reform of the rates valuation system.”
Young’s
Simon Dodd at Young’s had a more critical response, describing the announcement as short term relief that fails to address deeper structural issues.
“These measures may provide some temporary relief to pubs but it is ultimately just an example of sticking a plaster over a much bigger wound, which is disappointing,” he said.
“It is nowhere near enough to fix the fundamental problem of a broken business rates system that disproportionately penalises bricks-and-mortar premises. For years we have been calling for real business rates reform – or ideally, the scrapping of this unfair tax altogether.
Hospitality can be a powerful driving force for growth in the UK, but only if the government delivers a genuine growth agenda by reducing VAT, freezing beer duty and properly addressing business rates.”
Trade bodies:
UKHospitality
UKH welcomed the intervention but stressed that rising costs remain a hospitality wide issue.
Chair Kate Nicholls said: “The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The Government’s immediate review of hospitality valuations going forward is clear recognition of this.
This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs. The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets.”
CAMRA
CAMRA chair Ash Corbett-Collins warned that the relief does not provide the certainty publicans need.
“This short-term announcement is not the ‘permanently lower business rates’ that pubs were promised,” he said. “While it is positive that the Chancellor has listened and announced extra discounts for pubs facing the threat of closure, it is short-sighted to think that today’s statement will give publicans the certainty they need.
“The plan to review the unfair way pubs are assessed for business rates is welcome, but this leaves pubs in the same situation as they have been for years – still facing a long wait for promised, and fundamental, reforms to make the system fairer.”
On licensing hours and planning reform, Corbett-Collins added: “Letting pubs stay open for longer or extending their premises is not going to solve the fundamental problem where otherwise viable businesses face being taxed out of existence.”
Night Time Industries Association
The NTIA described the relief as insufficient in the context of wider cost pressures.
Michael Kill, chief executive of the NTIA, said: “While any recognition of the pressures facing pubs and music venues is welcome, this intervention amounts to little more than a drop in the ocean when set against the reality of the current tax system and the cumulative damage inflicted by the last two budgets.
“This limited, narrowly targeted relief raises a serious question: what will this actually do for the hospitality and night time economy as a whole?”
Kill warned that “piecemeal, sub-sector-specific interventions will not stabilise the industry”, adding that without a sector-wide approach “closures will continue, jobs will be lost, and vital cultural and social infrastructure will be permanently damaged”.
British Institute of Innkeeping
BII chief executive Steve Alton said the announcement would buy time for many pubs, but stressed that long term reform remains essential.
“The majority of our members, independently operating pubs in every community, will now see the business rates they pay today frozen or reduced from April, and held at that level over the next three years,” he said.
“This cannot be the end of the story, however. Today’s announcement will buy many in our sector time, but their situation is still untenable in the long term, with over 40p in the £1 still going to the Treasury.
“This must be the beginning of true reform of the systems that have overtaxed our sector for so many years.”
Further reaction
Andy Slee, chief executive of the Society of Independent Brewers, said: “SIBA welcomes the announcement from Government they’re backing Britain’s pubs and the breweries which supply them. On the basis the further 15% cut announced today applies to the business rates bills that were due in April this is good news for pubs and brewers, and will allay some of their worst fears.”
He added that recognition of the need to reform the business rates system was “welcome”, and said the organisation looked forward to working with government on a long term solution.
Saxon Moseley, head of leisure and hospitality at RSM UK, described the announcement as “a welcome, important first step”, but warned that excluding restaurants and hotels risked creating new inconsistencies across the sector.
Champa Magesh, managing director of Access Hospitality, described the move as a positive but limited step.
“It is pleasing to see the Government acknowledge the vital role hospitality plays in the UK’s economic and social fabric,” she said. “The package is a small step in the right direction and recognises the support needed for pubs, but this support needs to be delivered swiftly to protect businesses’ long-term growth.
“It is disappointing that this latest package focuses primarily on pubs, without extending the same level of relief to restaurants, hotels and the wider hospitality sector. Hospitality is an interconnected ecosystem, and long-term resilience depends on ensuring all venues are supported consistently.”
