Government bailout for pubs

Every pub in England will get 15 per cent off its business rates bill from April as the government moves to support the struggling hospitality sector.

Their bills will then be frozen in real terms for a further two years. Treasury minister Dan Tomlinson told the Commons: “This support is worth £1,650 for the average pub, just next year.”

He added: “It mean that around three-quarters of pubs will see their bills either fall or stay the same next year.”

The valuation model used for pubs will also be reassessed. Mr Tomlinson said pubs had not had the support they have needed “for too long”.

The support package has been welcomed but there remain strong calls for more to be done to help the wider hospitality industry.

Announcing the moves, the minister said: “This government does want to go further to support pubs. Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country.”

This support will also apply to music venues, Mr Tomlinson added. “Many live music venues are valued as pubs and many pubs are grassroots live music venues. It would not be right to seek to draw the line so tightly so as to include some and not others.”

The government’s move came after increasing concerns over its plans to overhaul business rates.

They left many venues facing an increase in their business rates bills from April. This was because, although the government lowered the multipliers – a figure used to work out how much businesses pay in rates – many pubs, restaurants and hotels had their properties revalued, and the new values were often much higher.

Trade bodies had warned that chancellor Rachel Reeves’s changes to business rates, announced in her November Budget, would trigger widespread closures and job losses in the hospitality sector, particularly in pubs.

With costs mounting and margins tightening, they predicted closures would intensify, stripping communities of essential social hubs and wiping out thousands of jobs.

UK Hospitality, the body which represents the wider sector, said the measures announced by Mr Tomlinson “address an acute challenge facing pubs”.

However, Kate Nicholls, who chairs the organisation, warned: “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.

“The devil will be in the detail, but we need to see pace and urgency to deliver the reform desperately needed to reduce hospitality’s tax burden, drive demand, and protect jobs and growth. We will work with the government over the next six months to hold their feet to the fire to deliver this.

“This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs.”

She added: “The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets. They need to see substantive solutions that genuinely reduce their costs.

“Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers. Those are costs borne by us all, and I hope the government delivers on its promise to support the whole hospitality sector.”

The British Beer and Pub Association (BBPA) said it would “stave off the immediate financial threat posed by accelerating business costs and will help keep the doors open for many”.

Its chief executive Emma McClarkin said landlords across the country would “breathe a sigh of relief” but added the organisation’s focus was now on long-term reforms to business rates.

The government also announced that it will consult on loosening planning rules to help pubs, which could mean they will be able to add guest rooms or expand without planning applications.

Mr Tomlinson said: “We will also continue to engage with the sector to ensure that other retail, leisure and hospitality premises have flexibility.”

• To discuss any issues raised by this article please call me on 01772 430000