Government considers ‘further support' for rates-hit businesses

23-Feb-2017 - Last updated on 23-Feb-2017 at 11:13 GMT

Support: Sajid Javid has vowed to help businesses facing steep business rates increases

Communities minister Sajid Javid has told MPs that he will work with the Chancellor to provide “further support” for businesses worst hit by rate rises due in April.

Speaking to MPs in parliament yesterday, Javid said it was clear that "more needs to be done to level the playing field and to make the system fairer" when asked about business rates and the potential to provide more relief.

The Secretary of State for Communities and Local Government said: "I am working closely with the Chancellor to determine how best to provide further support to businesses facing the steepest increases. We expect to be in a position to make an announcement in the Budget in just two weeks’ time."

When approached by The Morning Advertiser for specific information on how this might benefit pubs, Javid's department reiterated that it was working with various pub industry bodies to agree a fair system for pubs, but did not specify how the government would do this.

'Already an unfair tax on pubs'

However, campaigning bodies such as the Association of Licensed Multiple Retailers (ALMR) and the British Beer and Pub Association (BBPA) have suggested that wholesale reform of the system is needed. Radical reforms could include scrapping the use of trading figures when evaluating a pub’s rateable value.

Brigid Simmonds, chief executive of the BBPA, voiced her approval of Javid saying he would aim to level the playing field, but urged the Government to go further. "I was pleased that Sajid Javid specifically mentioned the need for a level playing field," she said.

"In our whole campaign on business rates, we have always been clear that businesses with online sales must make a bigger contribution, so that we can protect pubs from excessive rates bills. Rates are already an unfair tax on pubs, but we then also have to contend with other huge tax burdens, not least of which is beer duty."

Following Scotland's lead

Javid's announcement follows mounting pressure from those in the pub industry and other businesses, which culminated in the devolved Scottish Government confirming a one-year cap on business rate increases.

Business rates for hospitality business will be capped at 12.5% from when the new business rates take effect. The Scottish Beer & Pub Association (SBPA) estimates the move will save Scottish pubs a total of £6m.

The ALMR welcomed both the Scottish government's decision and the Welsh government's proposal to introduce £10m of rates relief for hospitality businesses, saying that such decisions increase pressure on Westminster.

ALMR chief executive Kate Nicholls said: "These moves by the Scottish and Welsh governments are a good first step in recognising that hospitality businesses are being unfairly treated by a system that does not work. Westminster must follow this example with sector-specific relief for pubs and bars that are uniquely disadvantaged by this totally unsuitable system.

"Action by the Government at the Budget can bring stability for businesses in the short term as they navigate the new rates. We can then begin to look ahead at fundamental reform of the rates system to guarantee fairness for hard-working businesses."