Landlords of pubs in Gloucestershire are calling on the government to abandon temporary fixes in the ongoing struggle with business rates. They argue that these so-called "sticking plaster" solutions simply don’t address the root of the problem.
Recently, the government revealed intentions to reduce the proposed business rate increases that were initially outlined in the November budget. However, during a gathering in the Forest of Dean, many pub owners expressed their concerns that more substantial changes are necessary to ensure their survival. Phil Kiernan, who runs the Farmer's Boy Inn in Longhope, articulated the frustration felt by many: "We don’t want just a discount; we need a complete overhaul of the system. We need it eliminated entirely because our rates are projected to double."
Wayne Childs, who manages the King's Arms in Newent, added a grim statistic: "Three pubs are closing every single day across the UK, and without intervention, this trend is only going to escalate." At the meeting, it became clear that every pub represented was facing significant rate hikes, some amounting to tens of thousands of pounds, prompting many owners to reconsider their financial viability in the industry.
Nicki Bird, chair of the Forest of Dean Economic Partnership, highlighted the grave situation faced by many landlords: "I’ve spoken with numerous individuals today who aren’t even earning the minimum wage. They remain in this business out of passion, and it would be heartbreaking to see them exit the industry simply due to unaffordable costs."
Wayne Edge, who heads the Yew Tree in Longhope, expressed his distress over the impending £1,200 monthly increase in rates, stating, "We are already contemplating labor reductions and potential layoffs, which we desperately want to avoid, but this situation would be devastating."
So why are these pub taxes on the rise? In the November budget, Chancellor Rachel Reeves announced plans to end the pandemic-era discounts on business rates while also adjusting the rateable values assigned to pub properties. Business rates are determined by calculating the rateable value of a business and applying a percentage known as the 'multiplier.' Initially, the proposal aimed to lower the multiplier applied to pubs from around 50% to just below 40%. However, this reduction coincided with significant increases in rateable values—often doubling—resulting in a net increase in tax for many establishments.
In light of widespread pushback, the government is now considering revisiting these plans to implement smaller increases instead.
From my observations, it's evident that I have never witnessed such a level of dissatisfaction among landlords as I did at the recent meeting. Phil Kiernan, who has been vocal about his displeasure regarding the rising business rates, convened a gathering that drew around 40 local hospitality businesses—all before 7:30 AM.
This frustration isn’t isolated to Gloucestershire; it reflects a broader sentiment shared by pub owners throughout the UK. So, what exactly do the landlords desire? With the expiration of the 40% business rate discount implemented during the COVID-19 pandemic, they acknowledge that while the virus may no longer pose a threat, a similar relief measure is essential for their continued operation. Although ministers have reduced the tax rate or 'multiplier' in the complex calculation of business rates, there remains widespread anger concerning the method of calculating rateable values, with many establishments seeing substantial increases.
Could it be possible for ministers to reassess how these values are determined? Is it time for a comprehensive reform of the entire business rates system? One thing is clear: pub landlords are not just frustrated; they are becoming increasingly organized in their response to these challenges.
