More than 3,700 pubs ‘could close without business rates relief extension’

23-Oct-2018 - Last updated on 23-Oct-2018 at 08:36 GMT

Pubs at risk: a new report has revealed pubs and jobs will be at risk unless the Chancellor extends business rates relief

According to a new report commissioned by the British Beer & Pub Association (BBPA), 3,788 pubs could be at risk of closure unless Chancellor of the Exchequer Philip Hammond extends the £1,000 sector relief rate for pubs.

The findings have been revealed as Chancellor Philip Hammond is set to announce his 2018 Autumn Budget on 29 October.

The report, produced by economics consultancy Europe Economics also found that 20,000 full-time jobs, and 30,000 part time, could be lost due to a range of cost pressures including beer duty, business rates and VAT.

If just one fifth of the pubs at risk were to close – meaning an additional 750 pubs closing on top of the current three pubs a day – the industry would lose around 4,000 full-time and 6,000 part-time jobs.

The report findings follow news reported by The Morning Advertiser that a group of publicans including Jodie Kidd has delivered the Long Live The Local campaign's petition to cut beer tax to No.10 Downing Street ahead of the Autumn Budget.

According to Europe Economics, small community and rural pubs would be the most affected by a failure to extend rate relief for pubs. Almost three quarters (73%) of community pubs with turnover of around £4,000 per week and nearly one third (30%) of rural pubs with turnover of around £5,000 per week would be at most risk of closure.

Increasing tax pressures

Discussing the findings, chief executive of the BBPA Brigid Simmonds said: “The number of pubs in the UK is still falling; three close their doors for good each day.

“They are facing increasing and considerable tax pressures from a range of sources; particularly high beer duty, unfair business rates and VAT. This is deeply concerning because pubs are a great British institution and are often the social hub of their community.

“Pubs pay more than £500m in business rates and 2.8% of the total bill, although they only equate to 0.5% of turnover. This important study highlights why we are calling on the Chancellor to extend the £1,000 rate relief for pubs beyond this year.

“This will save thousands of jobs and ensure that pubs across the UK can remain open, including community pubs and those in rural areas who would suffer most should their rate relief be axed.

"The report also confirms why delaying revaluation following a new investment would also be a major boost.”

Simmonds' call for extended business rates relief follows a similar call by Altus Group, which also revealed that a quarter of pubs eligible for Government aid have missed out on assistance as a result of European Union rules governing state aid.

The report also includes a proposal to introduce a relief to pubs that offer community services, in recognition of the valuable role that pubs play in boosting community cohesion, as well as a call for a delay in the revaluation of pub premises that have received investment to either two years or until the next revaluation period, whichever is longer.