Procurement · 8 March 2017

Spring Budget 2017: £1,000 business rates discount to protect British pubs

British pubs
According to CAMRA, 29 British pubs are closing every week

Chancellor Philip Hammond offered a lifeline to British pubs ahead of the business rate re-evaluation by unveiling a special discount in the Spring Budget 2017.

Local pubs with a rateable value of under £100,000 will be handed a £1,000 discount to absorb business rate increases for 2017/18. The calculation works out at nine in every ten British pubs.

Over 15,000 pubs have previously been predicted to face an average rate rise of 19 per cent under new re-evaluation, and pub owners and breweries will hope the chancellor’s £25m discount package will support threatened businesses.

However, Labour MP for Oldham West and Royton Jim McMahon argued that the discount would be ineffective for the number of pubs either out of business or facing closure.

Business Advice reached out to McMahon, who offered the following comment on the insecurity of Britain’s pubs.

“Many pubs stand at the heart of our communities, and following our calls for further support to pubs struggling with scheduled increases to business rates we welcome the proposed relief for pubs.

“But there are serious questions about what happens when this support ends as scheduled in April 2018 – are our pubs going to be able to afford to stay open then? What support will the government provide next financial year?”

Landlords seeking more than a capped £1,000 discount could benefit from a separate £300m fund announced by the chancellor as a “discretionary” allowance for local authorities to use in special circumstances.

St Peter’s Brewery, which owns two pubs in Suffolk and London, got in contact with Business Advice, and CEO Steve Magnall said: “We welcome the relief in the latest Budget and we’re pleased the government has recognised the plight of pubs and the struggles they face. It will help our pubs in both Suffolk and London. Pubs are still closing at an alarming rate, hopefully this will ease some of the pressure.”

There was no rise in beer duty announced in the Spring Budget 2017, set to increase by three per cent next month, which could add further security to owners of British pubs and hospitality businesses.

Figures from CAMRA, which has been campaigning for real ale, pubs and drinkers’ rights since 1971, recently showed that 29 pubs are being lost every week across the UK.

Despite the announcement of no new duty increases, Colin Valentine, CAMRA’s national chairman, commented: “UK beer drinkers, pubs and brewers have been let down by the Chancellor’s decision to increase beer duty for the first time in five years.

“The announced two penny a pint increase marks a return to the days when the much-hated Beer Duty Escalator contributed to 75,000 job losses, 3,700 pub closures and a 24 PER CENT fall in beer sales in pubs. The rise in beer duty will ultimately hit consumers in their pockets and lead to pub closures across the country.”

Sheffield Heeley Labour MP Louise Haigh claimed that current increases to beer duty were already “disastrous for pubs across the country”.

Local pub owners with turnover below the VAT threshold of £83,000 have also been granted another year before quarterly tax updates are required as part of the Making Tax Digital initiative, extending to April 2019.

A toast to the chancellor?

Bruce Fowler, ratings expert at Bruton Knowles, a property consultant specialising in pubs, said that landlords would be “raising a glass to the chancellor”.

“Although our economy appears to be much stronger, many pubs are either still suffering from previous years’ uncertainty, or as in many cases, have had to close their doors permanently.

“We are pleased money has been set aside for this industry. It is encouraging that government recognises the importance of pubs in the rural economy as they are often the hub of local villages and towns,” Fowler said.

If you’re worried about the business rates review, have a look at our other advice-based content on the topic.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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