‘Four-fold business rates rise enormous’

At The Morning Advertiser​’s MA Leaders Club event in Oxford this week (Wednesday 2 October), British Institute of Innkeeping (BII) chief executive Steve Alton outlined his thoughts on the Government’s perspective of the sector.

The BII boss highlighted how there has been various meetings between sector leaders and Government officials during Labour’s tenure so far.

He said: "The narrative is positive, they want growth, they want employment, they want high street regeneration and guess what? We are absolutely integral to all of that.”

Alton went on to reiterate concerns around the reported outdoor smoking ban earlier in the summer.

“There's some of the kite flying, let's call it, in some of these issues [such as] the smoking ban, which we all feel incredibly strongly about,” he said.

"The disproportionate impact it would have, particularly to local community pubs, heartland pubs and they are not understanding, potentially, how fragile some of these pubs are.”

No surprise

Research from the BII and fellow trade bodies​ earlier in the year indicated just under one in two operators broke even over the summer with a further quarter having made a loss during the traditionally bumper months.

Alton said: "We've surveyed our members along with our colleagues at UKH, BBPA and others, within wider hospitality that one in three aren't making a profit, it's worse for pubs.

"One in four pubs are losing money and only one in four are turning a profit.

"This is no great surprise with the compounded impact of inflation, wage costs and energy are still ever present and the trading pattern has changed."

With less than a month to go until the Budget (30 October), Alton said: "Actions will bear out, words are cheap. We've got a major fiscal event coming up and that's where we need to find out if some of this narrative is going to start helping us,” he added.

"We've got a very mixed picture, there's a real fragility. Some operators are absolutely smashing it, which is fantastic but there are a lot of mid-tier operators who have been doing this for decades and have very sustainable businesses that right now are marginal.

"They need that encouragement to invest, it's holding back business growth.”

Party manifesto

Business rates was part of Labour’s five-point plan​ in its manifesto during the lead-up to the general election.

The party pledged to replace business rates with a new system of business property taxation in a bid to ‘rebalance the burden and level the playing field between high streets and online giants’.

The current rates relief is set to expire at the end of March next year and a number of voices have been calling on the Government to take action in the upcoming Budget,

Alton said: "A four-fold increase [in business rates] for most larger operators is enormous. We've got members who are holding back on that next site, holding back on that capex because of that uncertainty.

"It swings enormously, the viability and returns you're going to get from that site. That uncertainty is hugely unhelpful at a time when they (the Government) want us to invest and power growth."