Furthermore, the Welsh Government revealed rates will also rise by 5% next year but this was lower than the 6.7% increase that would otherwise apply from the default inflation of the multiplier in line with CPI.
While some form of support was welcome, almost halving the discount has raised concern from the sector.
UKH Cymru executive director David Chapman said: “I’m pleased the Welsh Government has heard the concerns from UKH Cymru and taken the decision to continue some form of business rates relief.
“UKH campaigned hard for relief to be extended in Westminster, which resulted in additional funds for the Senedd and it is clear hospitality has been recognised as a sector in need of support.
“While we appreciate the economic pressures the Welsh Government is under, there will be concern from businesses that relief has been reduced to 40% to 70% and business rates will be increased across the board by 5%.
“It must be remembered hospitality businesses already pay more than their fair share of business rates because the current system is out-of-date and punitive for bricks and mortar businesses.”
Competitive disadvantage
The drop means Welsh pubs were at a “competitive disadvantage” to businesses in England, where the 75% discount was extended in Jeremy Hunt’s Autumn Statement last month (November).
“This reduced level of support now leaves businesses in Wales at a competitive disadvantage to businesses in England,” Chapman added.
“Small businesses in particular will feel hard done by as their counterparts will see rates frozen across the border.
“A typical local pub or restaurant in Wales will, for example, be paying £6,400 more than one in England.”
He labelled the fact the Government is taking £16m of funding from the tourism budget as extremely disappointing.
Chapman said: “This is a strategically important sector in Wales and central to our culture – it needs investment and this sharp reduction in overall budget is worrying.
“At a time of intense economic challenges, this slashing of the tourism budget will do little to inspire long-term confidence in the sector, particularly alongside the looming introduction of a visitor levy and other policies that are impacting hard on the sector.”
Heart of community life
From a guest point of view, consumer group the Campaign for Real Ale (CAMRA) warned the reduction in business rates help could lead to further closures.
CAMRA Wales director Chris Chaters said: “Pubgoers will be disappointed to see support for business rates bills for pubs, social clubs and breweries being cut – despite money from the UK Government being made available to keep the discount at 75%.
“Our locals are at the heart of community life across Wales, bringing communities together, helping to tackle loneliness and providing a safe social space to enjoy a drink with friends and family. They deserve help so they can survive and thrive in the months and years ahead.”
Chaters called for the Welsh Government to rethink the decision and to retain the 75% discount on business rates.
“At a time when customers are tightening their belts and businesses are grappling with rising costs, this help is desperately needed if we are to avoid more pubs, clubs and breweries being lost for good to communities across the country.”
