Pubs criticise prospect of licensing reforms in face of higher business rates
Sector calls on ministers to provide urgent financial support following Budget measures
Pub bosses have criticised Sir Keir Starmer’s suggestion that higher business rates bills can be softened by licensing reforms, as they called on the prime minister to provide urgent financial support.
Industry leaders met Treasury minister Dan Tomlinson to discuss the burden of business rates on the hospitality sector, with a Budget increase in the tax paid on commercial properties adding to pressure on pubs.
The increases in pubs’ costs stem largely from higher “rateable values” — estimates of a premises’ annual rent used to calculate rates — which have risen considerably since the last pandemic-era valuation.
In some cases, rateable values have doubled or trebled, although a typical increase is about 30 per cent. Pubs are also facing the withdrawal of Covid support, which offered 40 per cent relief on rate bills.
The prime minister on Monday said pubs would “struggle” as a result of the higher rateable values, telling LBC that “because of revaluation, that means that some will have their bills going up”.
The government was putting transitional relief in place — though pubs say bills will still be significantly higher in three years’ time — and looking at “licensing freedoms”, he added.
Downing Street said on Tuesday that it was exploring “speeding up licensing reforms, slashing red tape, helping more venues stay open later, offering pavement drinks and putting on one-off events”.
But Jonathan Neame, chief executive of pub group Shepherd Neame, dismissed licensing reforms as “a shallow political smokescreen, which will make little or no difference to the hospitality sector”.
David Wigham, managing director of Admiral Taverns, said: “Licensing reforms does nothing to tackle the rising costs that the government is causing.”
“The government needs to offer financial support to the industry and the business rates reduction that we were led to believe was coming,” he added.
Anger within the industry over the changes has led to Labour MPs being banned from more than 1,000 pubs across the UK following a grassroots campaign, with landlords arguing the November Budget has triggered an existential threat.
Alex Reilley, executive chair of Loungers, which has 250 cafés and bars across the UK, said he did not “know of a single hospitality business that is calling for more relaxed licensing laws to allow for extended opening hours. On the contrary, in an attempt to make their business viable, [a] large number of hospitality businesses are reducing their hours.”
Pubs could not afford the extra costs of operating for longer, Reilley added, noting that customers were “eating and drinking earlier than they were pre-Covid”.
Andy Spencer, chief executive of Punch Pubs, which has about 1,250 venues in the UK, said that while it was “encouraging to hear the government acknowledge the pressure pubs are under, warm words alone won’t be enough”.
One hospitality sector boss said: “If a pub isn’t viable because of government cost pressures, it’s irrelevant what time they can open and close or have alfresco seating.”
After the meeting with Tomlinson, Emma McClarkin, chief executive of the British Beer and Pub Association, said the government “understands the strength of feeling amongst the sector” and was “in listening mode”.
“We will be meeting again in the coming weeks,” she added.