Business rates in a state

30-Oct-2013 - Last updated on 30-Oct-2013 at 16:53 GMT

Willock: "The PMA is led to believe that ministers are sympathetic to the plight of pubs under the current business rates regime"

I’m going to step away from the thorny issue of pubco regulation this week, despite the temptation to comment on the latest moves from either side of the divide to influence the imminent Government announcement on its plans to legislate or not. Instead, I want to pick up on a topic that affects all pubs, not just tenanted and leased ones — that of business rates.

In a great show of togetherness, reminiscent of their efforts on beer duty, the pub trade’s associations have joined forces — with the support of the PMA and an early day motion in Parliament by Charlotte Leslie MP — to demand ‘Better Rates for Pubs’, by which obviously we mean lower and fairer rates for pubs.

The urgency of this campaign has been heightened by the imminent expiry in April 2014 of small business rate relief, something the British Beer & Pub Association believes could cost pubs £27m.

This will be on top of the already disproportionately high level of business rates paid by pubs — thanks to the way they are determined, and due to the fact they were calculated in the good times, just before the country plunged into recession.

Punitive

A two-year delay to the revaluation exercise, originally due this year for implementation in 2015, was sold to the trade as a benefit — preventing further increases for most — though few in the industry saw it that way.

The PMA is regularly contacted by licensees whose business rates threaten the viability of their business, whose rates are not properly adjusted to take into account detrimental changes to their customer base, or whose rates are punitively hiked as soon as they achieve growth.

Here’s a recent tweet from the Association of Licensed Multiple Retailers chief executive David McHattie by way of example: “Price of success? Take a failing business, grow it, create jobs and get a rates increase from £13k to over £100k! Madness.”

We are told any changes to business rates must be revenue-neutral for the Treasury, meaning the Exchequer can’t afford for its total business rates receipts to fall; so any winners in the process must be balanced by losers. If your pub ends up paying £1,000 less, some other business will have to pay £1,000 more.

Lobbying

However, the PMA is led to believe that ministers are sympathetic to the plight of pubs under the current business rates regime. Indeed a ministerial birdie recently told me that the pub industry would have more success campaigning on business rates than on VAT with the current Government.

That’s about as strong a clue as you’re ever going to get from a politician on how and where to focus your lobbying efforts.

The PMA is keen to learn more about your experiences of business rates and how they affect your pub operation, so we’d be grateful if you’d complete our short survey here.

We’ll feed back the responses in due course and use them to inform the next stage of the campaign.