CAMRA calls for £5,000 business rate relief for pubs

06-Aug-2017 - Last updated on 07-Aug-2017 at 14:49 GMT

Demand: CAMRA chair Colin Valentine wants pubs to be given a £5,000 rates discount

Pubs must sell tens of thousands of extra pints of beer each year to cover the rocketing rise of business rates, according to the Campaign for Real Ale (CAMRA).

The organisation is calling on the Government to introduce a £5,000 annual reduction to stop viable community pubs from being driven out of business, ahead of its iconic Great British Beer Festival, which starts tomorrow (Tuesday 8 to Saturday 12 August at London’s Olympia).

This announcement followed research conducted by YouGov on behalf of CAMRA that found more than two thirds (69%) of the 2,076 adults who took part in the survey agree that pubs should receive tax relief because they provide safe, managed places for people to get together and drink responsibly.

While the Government vowed the protect local pubs by announcing a £1,000 business rates discount in the spring Budget this year (March), CAMRA has said this is not enough to keep many pubs afloat.

Sean Hughes, licensee of the Boot in St Albans, Hertfordshire, is set to see his rates bill soar by 280% over the next five years from £14,000 a year to £52,000.

He said: “Our new business rates bill means that we would have to sell an additional 22,000 pints of beer a year just to pay for the increase.

“I can’t see how we are going to do that – it leaves us in a very difficult situation. We’ve already had to increase our beer prices by 10p per pint and expect that to increase to 35p a pint.”

Pint at the pub

Hughes added: “If customers can’t afford a pint at the pub they will go elsewhere, which means that our historic pub of 600 years may cease to run as a public house.”

He also called on the Government for support in order to continue trading.

James Brown, who runs three pubs as part of the Brown Ales portfolio, outlined how all of the group’s sites were seeing huge rises to their business rates.

“The Chesterfield Arms [in Chesterfield, Derbyshire,] has seen its rateable value rise from £27,000 to £64,000 – an increase in its final business rates bill of 140%,” he said.

Brown added: “What is the incentive to run a successful business if the additional profits are taken away in rates?

The £1,000 reduction is just a drop in the ocean when rates are increased by £20,000 – any publican will tell you that the business rates system is the most unjust cost to successfully run pubs in this country.”

CAMRA national chairman Colin Valentine hailed the proportion of taxes on the cost of a pint as “unsustainable”.

Integral part of social lives

He said: “Taxes now make up more than a third of the cost of a pub pint.

“Despite the fact that pubs currently account for 0.5% of turnover of the UK economy, they are still paying 2.8% of the business rates.

“This is frankly unsustainable, and it is the consumer that will ultimately pay the price, whether it is when their beloved local closes down or when the price of their pint goes up.”

Valentine highlighted the vital role pubs play in local communities and how most people believe they need help.

He added: “From celebrating a special occasion to meeting up with friends after work, pubs are an integral part of many people’s social lives.

“Business rates relief is urgently needed in order to ensure their continued survival.”

CAMRA is also calling on the Chancellor of the Exchequer to freeze beer duty for the remainder of this parliament to help cap the price of beer, keeping more money in drinkers' pockets and helping the pub and brewing sector to grow.

British Beer & Pub Association (BBPA) chief executive Brigid Simmonds said: “This is something we called for in the BBPA manifesto for the General Election, so it is hugely welcome that CAMRA, which represents over 180,000 consumers, is also backing £5,000 in pub-specific rate relief.

“CAMRA is right to highlight that pubs are very unfairly disadvantaged by the current rates system. As a sector, we pay per 2.8% of the total business rates bill, but only generate 0.5 per cent of turnover. We need a wholesale review of the current system and, at the very least, need to bring those who benefit from online sales into paying more of their share.

“It is also good to see CAMRA backing a freeze in beer duty for the lifetime of this Parliament. RPI increases, like the 3.9 per cent seen in the March Budget, are unsustainable and have already cost the industry £130 million this year.”