‘Make your mind up – it’s bonkers’: Exasperated pubs welcome business rates U-turn but warn they need more help

Pub landlords have welcomed the news that the government is set to U-turn on plans to scrap business-rate relief for the hospitality industry – but warned it may not be enough to keep doors open.

At the Budget, the chancellor announced plans to scale back the business-rate discount that has been in force since the pandemic, from 75 per cent to 40 per cent – and said there would be no discount at all from April this year.

The announcement was met with fury among pub landlords, many of whom have warned that they are already on the brink of closure amid a continuing struggle in the years since the pandemic.

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The chancellor is now expected to extend relief to help landlords with rising bills, instead of scrapping cash support from April, ministers have told The Independent.

Pub owners have said the move is “positive news” for an industry “in desperate need of help”, but many added that they still have concerns about other measures introduced by the government.

Dawn Hopkins, 56, who runs the Rose Inn in Norwich, said news of the U-turn will come as a “huge relief” to many pubs, but added that there are still concerns about the re-evaluation of business rates.

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“Getting a discount back would be a huge relief, and at this point, anything would help,” Hopkins, who is also the vice-chair of the Campaign for Pubs, told The Independent.

“But a major problem is that they’ve done these re-evaluations of business rates, which have been astronomical in a lot of places,” she said. “So getting a discount back would be amazing, but we still need to look at the re-evaluation issue.”

Chris Welch, 39, who runs the Fishnet Tavern in North Tyneside, said: “It’s really positive news if this happens, but I still think more needs to be done.”

Mr Welch, who says his business rate is set to increase by an extra £4,000 each year following the Budget, said: “I would say we would need a discount on VAT and other tax reliefs. I know I may sound greedy, but the industry needs major help to aid with recovery. Quite a lot of damage has to be recovered.

“Anything helps, though, at this stage.”

Tom McNeeney, who has run The Oxford in Rochdale for 13 years, said the U-turn is “a huge start in righting the wrongs”, but fears it won’t be enough to save many pubs.

“We can’t stress enough how much this U-turn has been desperately needed in a sector that means so much more than pints and pies,” he told The Independent.

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“The government’s acceptance that a U-turn is needed sadly isn’t going to be enough to save many pubs, but it’s a huge start in righting the wrongs of successive crippling Budgets for the sector.

“If we can see the value in rethinking the business-rate reform, then it’s not too much to ask that, rather than the government putting us back in the situation we were in a few months ago, they take this moment to commit to some action that will actively save these vital businesses in our communities.”

He added: “Our pubs, their rich history and the social impact they have, are the lifeblood of so many of our communities. The impact a pub closure has on the lives of not only those employed there but the people around it is far-reaching: these are places that add social value, stave off loneliness, and provide hundreds of thousands of jobs to under-25s, who have never found it more difficult to get into work.”

Fiona Hornsby, 45, who runs three pubs in Liverpool, said the U-turn is “wonderful news”, but added that it would “be better if the new increased rateable value is scrapped, too”.

“It’s definitely good news, as any cost increase will unfortunately have to be passed on to the customer. In a cost-of-living crisis, it’s not ideal: with less money to spend, pubs become a treat,” she told The Independent.

But she said that the number of government U-turns is “becoming farcical”, adding: “They’re clearly not listening to trade bodies or business leaders in any meaningful way.”

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“An open pub pays tax – a closed one doesn’t,” she said, adding that one of her pubs now has a rates valuation 40 per cent higher than the rent. “The Labour Party made a manifesto promise that business rates would be overhauled, and a new, fairer system would come in to help the high street.”

Alex Greig, who owns Fuggles Beer Cafe in Tunbridge Wells, believes that while any reversal of the business-rate reform would be “positive”, the government needs to do more to help struggling small businesses.

Mr Greig said that the U-turn is “helpful” but that it is “nowhere near enough” to save small businesses, which have suffered from soaring energy bills, national insurance hikes, and increases to the minimum wage.

“I’ve been doing this for 20 years, and I’ve never known anything like the bottom-line destruction we are currently seeing,” he told The Independent.

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He said the government’s current phased approach to reducing the business-rate discount is simply “kicking the can down the road”, and accused ministers of “prolonging the doom”.

“We just need it to stop,” he said.

He added that the government’s inconsistent approach to policy makes it difficult for people like him to make big decisions.

“No one can really plan or think,” he said. “Make your mind up – it’s bonkers.”

At York’s smallest pub, The Blue Bell, landlord John Pybus called the business rates reform announced in the Budget a “betrayal” and added that any reversal would be “welcomed by the industry”.

“But one has to ask - why did you do it in the first place?” he said, citing business rates, national insurance rises, and alcohol duty as a “cumulative load” of issues faced by the industry in the last few years.

Jo Loring, who runs the Cosy Dove pub in Newcastle, said “wider issues need to be addressed” in response to the U-turn.

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“A U-turn on business rates is welcome, and it has to take the rates payable by a business somewhere close to what it is paying currently,” he said.

“Whilst a reduction in rates is a help, wider issues need to be addressed, such a wholesale pricing and the beer tie. It doesn't seem fair that one pub pays twice the wholesale price than the pub next door.”

The British Beer and Pub Association (BBPA) has said it is “heartening” that the government is listening to the sector, but advised that pub-specific business-rate relief would be the “simplest” way to help the industry.

Emma McClarkin, chief executive of the BBPA, said: “The clock is ticking for too many pubs who fear that they won’t survive shocking new bills.

“It’s heartening that the government is listening to the sector and seems willing to deliver on its promise to support pubs, but it must act before it’s too late.

“A pub-specific business-rate relief is the quickest, simplest, and fairest way to ensure our locals don’t vanish, jobs aren’t lost, and communities don’t lose precious hubs.”