Burnham has made a series of pub-focused interventions since entering Number 10, including saying pubs “need support” and “will get it” from his Government during People’s Major Questions, a social media Q&A.
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He also told MPs during Prime Minister’s Questions this week that he was “something of a pub person” and said the Government needed to “go further” to support hospitality, but stopped short of committing to a VAT cut.
Operators told The Morning Advertiser (MA) the tone from Burnham was welcome, but warned confidence would depend on what the Government delivers at the Budget on 28 October.
‘Numbers need to work’
Multi-site operator Tim Skinner said he was encouraged by Burnham’s tone and described the 20% business rates cut as a positive step.
He told the MA: “Saying pubs need support and that Government needs to go further on hospitality is welcome. But confidence will come from what happens next. Pubs don’t need warm words as much as they need the numbers to work.”
Skinner said the Government needed to recognise it could not “tax your way to growth” and called for a wider shift in policy to help businesses invest, employ and grow.
He added: “Business rates are part of it, but operators are being squeezed from every direction, employment costs, energy, inflation and taxation.
“If I could choose one measure at the Budget, it would be a reduction in VAT for hospitality to 10%, bringing us more in line with the rest of Europe.
Give good businesses some oxygen and they will invest it back into their teams, their properties and their communities.
Tim Skinner
Skinner also urged the Government to look again at proposed changes in the Employment Rights Bill, warning some measures could make employers more cautious about recruitment.
He said: “We should be making it easier and more attractive for businesses to give young people their first opportunity, not creating additional risk around employing them.”
‘VAT is number one’
Cheshire Cat Pubs & Bars boss Tim Bird said Burnham was “making the right noises” but warned operators needed delivery.
He said: “Actions speak louder than words. We have had no actions at all, just words that say rates will be discounted next April to less than the Conservatives discounted them.”
Bird said the 20% business rates cut was not enough on its own and called for wider reform of how pub rates are calculated.
He added: “VAT is number one. Align us with Ireland.
“A full rates review on how rates for hospitality should be calculated and then get the charges right. Employers’ national insurance is a national issue across all companies that employ people.”
Multi-site London operator Heath Ball said Burnham was “talking the talk” but not yet “walking the walk”.
He told the MA: “The business rates cut was a drop in the ocean. It’s not the biggest problem. We’re being taxed out of existence. If he really wants to support pubs, he needs to pull the lever on VAT. A 10% rate helps us navigate all the other crazy costs coming at us.
“Paying 40p in every pound in tax doesn’t leave much for the operator.
He says he understands pubs. He goes to the pub, he smiles. But the time is now. If this Budget does nothing, hospitality won’t be on its knees, it’ll be lying face down in the gutter. VAT is the answer. Pull the lever.
Heath Ball
Loss of trust
Brewhouse & Kitchen executive chairman Kris Gumbrell told the MA that the business rates announcement had been an “eye-catching” start, but questioned whether it was “good optics” or “heartfelt”.
He said: “Burnham has got off to an OK start. We’ll know more when the Budget comes through, but the problem is that we’ve all lost a lot of trust.”
Gumbrell said one of his sites had been facing a rates bill rising from £46,000 to £98,000, with the discount still leaving it around £20,000 worse off.
He said the sector needed more than business rates support, with employment costs causing “long-term damage” to hospitality.
He added: “Employment costs are the biggest issue. If you want to create more jobs, you can’t have it both ways.”
‘Glimmer of light’
Ayesha Kalaji, chef-patron and owner of Queen of Cups, and Estrella Damm’s Top 50 Gastropubs Chef of the Year, said Burnham’s comments provided “a glimmer of light” but warned operators needed to see real change.
She said: “We know the Government needs to go further to support hospitality, but saying it and doing it are vastly different things.”
Kalaji described the business rates support as “a drop in a vast ocean” and said a VAT reduction would offer a lifeline to the sector.
VAT is the problem. A reduction to a 10% VAT rate for hospitality would throw a lifeline to an industry that is already on its knees.
Ayesha Kalaji
Hayley Pellegrini, co-founder of Pelle Pub Co, said there was “more hope” under Burnham than previous prime ministers, but said the sector needed more support at the Budget.
She said: “They can all talk a good game. The business rates cut is like putting a plaster on a grazed knee, when the reality is our legs are being amputated with the sheer costs of running the business.”
Pellegrini said VAT, business rates and employer costs all needed attention, warning reduced staffing levels were putting pressure on teams and limiting opportunities for entry-level workers.
Budget test
JW Lees managing director William Lees-Jones said he believed the Prime Minister was “sympathetic to the sector” and remained optimistic.
He said: “I think the PM is sympathetic to the sector and remains optimistic that he believes the only way he can kick start the economy is by finding growth while holding back on public spending.
“So let’s see, and he’s already on the record for saying that 10% VAT would be a good idea.”
The comments come as the sector continues to call for further support ahead of the Budget, with trade bodies and operators warning pubs remain under pressure from labour, energy, tax and wider operating costs.
Since taking office, Burnham’s Government has announced a 20% cut to business rates bills for pubs, social clubs and live music venues from April next year, alongside an independent review into how pubs and hotels are valued for business rates.
