STRUGGLING city pubs and bars have raised a glass to the new Prime Minister over plans to slash business rates, but some industry insiders say it does not go far enough.
Pubs, clubs and live music venues are set to benefit from a 20 per cent cut in business rates under new Government plans announced by the new Prime Minister, Andy Burnham, saving them more than £1,000 each a year.
However, while some ‘delighted’ landlords in Worcester say the move offers the troubled trade a vital lifeline and could save some pubs from closure, others feel the announcement does not go far enough.
Pressures on pubs and bars, including some hidden costs, are mounting because of rising utility bills and the high price of fuel after spikes caused by the US war with Iran.
Meanwhile, earlier hikes in the minimum wage and the need to address issues over VAT have also been cited by some landlords and bar owners.
HOPE: Prime Minister Andy Burnham has announced a 20 per cent cut in business rates for pubs, bars and live music venues (Image: Press Association)
A typical pub will save around £1,100 next year through the business rates cut.
Hannah Webb, operations manager at Bottles Wine Bar and Chad’s Gnashery in New Street, Worcester, said: “I was absolutely delighted to wake up to that news this morning. It’s such a welcome relief for our industry. I’ve worked in hospitality for around 20 years now, and it’s felt like a long old slog, especially since Covid.
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“The irony is that we were missed so sorely during Covid – venues, music venues, places to socialise essentially – and we are essential to community and to human life. So for those that have made it through, I’m sure this is just some fantastic news and a welcome relief.
“Hopefully it means that fewer and fewer pubs and live music venues will be closing in the future. Let’s hope that Andy Burnham keeps pushing through promises like this, and high hopes for the future.
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“I implore everybody to go for their pint, visit their local, keep supporting independent hospitality businesses, and hopefully the government will do the same.”
PRESSURES: Darren Young, landlord of King Charles House in New Street, welcomed the business rate cut but says more could be done to support the pub trade (Image: James Connell/Newsquest)
Darren Yong, landlord of the King Charles House in New Street, said: “It helps, but it doesn’t really go far enough. It costs around £35,000 a year to power King Charles House, for the gas and electricity. They’re the costs people don’t see. Add minimum wage increases, costs for VAT disparities on food, and it’s tough. There are no millionaire landlords out there.”
For example, he said pubs could claim back very little VAT on the purchase of food, in contrast to the wet trade and price increases were sometimes the only way to keep a business viable.
The National Living Wage has also risen from £8.91 for staff aged 23 and over in April 2021 to £12.71 (now for over 21s) in April this year.
OPTIMISTIC: Craig Finn, an owner at TripelB, hopes the business rate cut will be part of a raft of measures to help the pub and bar trade (Image: James Connell/Newsquest)
Craig Finn, an owner at TripelB Belgian Beer Cafe in Copenhagen Street, Worcester, said: “I think it’s a really positive step. We were hoping for an announcement on VAT as well, but I remain hopeful this is the first of a series of announcements. Perhaps there is more support to come.”
The scheme will come into effect from April 2027 and will support nearly 32,000 venues, providing certainty for businesses looking to invest, grow and create jobs.
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Prime Minister Andy Burnham said: “For too long, governments have stood by while cherished venues have disappeared from our local high streets.
“So today I am changing that.
“This government will back the businesses that people want to see in their communities.
“I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do.
“What we’re announcing today is just the start as we work to bring back hope across the country.”
Today’s changes will be fully funded, including through reviewing business rates relief for companies that do not contribute positively to their communities, including vape shops.
The Government also plans to crack down on businesses that sell through online marketplaces but do not comply with their tax obligations.
A consultation is underway on proposals to hold online platforms more accountable for non-compliant sellers who avoid tax obligations.
Revenue raised from these reforms will be reinvested to further improve the business rates system.
The business rates reduction is one part of a broader agenda to support town centres and strengthen local economies.
The Government has reaffirmed its intention to reform the wider business rates system, including Small Business Rates Relief, at the Budget.
Other measures in its plan include electricity bill VAT relief and the £2 cap on bus fares.
