Chancellor Rachel Reeves is poised to finally announce a new package of measures to tackle soaring business rates for pubs – but critics say more is needed
The founder of pub giant Wetherspoons has warned a tax divide with supermarkets would remain a huge challenge for inns – as Rachel Reeves prepares to reveal separate help.
The Chancellor is poised to unveiled a package of relief for pubs, thought to be worth about £300million, to help the sector cope with the end of pandemic-era support measures.
The measures are thought to involve easing the burden of soaring business rates. But Tim Martin, chairman of JD Wetherspoon, said pubs were also battling cut-price competition from grocers.
Asked what his message to the Chancellor would be, Mr Martin said: “I’d say Rachel, if you truly value pubs you have to create a level playing field. Supermarkets are incredibly powerful and profitable.
“You tax pubs more than them- we pay 20% vat on food. They pay zero. We pay 25p rates per pint they pay about 2p Anything less than equality will see pubs gradually (or maybe rapidly) decline relative to supermarkets.”
His plea came as Ms Reeves indicated she had listened to calls for help from publicans reeling from a proposed surge in business rates from April.
The Mirror has been championing the cause of the nation’s locals with its long running Your Pub Needs You campaign.
Ms Reeves, speaking on the sidelines of the World Economic Forum in Davos, said: “I do recognise the particular challenge that pubs face at the moment, and so I’ve been working with the sector over the last few weeks to make sure that the right support is in place.” She added that the government had already “permanently lowered the rate paid by retail hospitality and leisure”.
However, what is expected to be special treatment for pubs has left others in hospitality and elsewhere demanding similar help.
Jon Collins, chief executive at LIVE, which represents music and entertainment businesses, said: “The decision to protect pubs while penalising the venues that bring customers through their doors is a self-defeating policy.
“Operators are already facing business rates increases of up to 400%, putting venues of every size under severe financial strain and risking closures, job losses and higher ticket prices for fans.
“Data from the National Arenas Association shows that for every 10,000 people attending a live show, at least £1million is spent locally in pubs, restaurants, hotels, shops and transport. Arenas operate on tight margins and, unlike energy or staffing costs, business rates are a blunt instrument with no meaningful way to mitigate them.
“Operationally, this will mean job losses and higher ticket prices. Even then, this policy will deliver fewer shows and reduced investment.
“When an arena show happens, local hospitality benefits immediately; when shows are lost, that spending disappears. It makes no economic sense.”
Darsh Shah, a partner at advisory firm Blick Rothenberg, said: “The government is planning to boost the £4.3billion relief fund they have put in place to help pubs with increasing business rates.
“This fund should be extended to hotels, who are bearing the brunt of a number of tax and running cost increases.”
He added: “Some hotels face their ratable values going up by over 300% this year. On top of this they are contending with the increase in National Insurance Contributions and Higher National Minimum Wage.
“A support fund, like the one in place for pubs, would allow hotels to phase business rates bill increases over three years, taking some of the financial pressure off.”
