Burnham’s Business Rates Cut Brings Mixed Reactions Across High Street

Constantvpn.com – Industry leaders have responded positively to Andy Burnham’s latest initiative to reduce business rates for pubs, social clubs, and live music venues. This marks the third significant policy declaration from Burnham within a three-day period. According to UK Hospitality, the move demonstrates that his enthusiasm for the hospitality sector “survived his trip down the M1” without diminishing.

Financial analysts estimate that the 20% discount, layered on top of emergency business rates relief introduced in January, will provide the average pub with savings exceeding £1,000. Despite this welcome news, numerous High Street enterprises expressed disappointment at being excluded from the support scheme and demanded that the package be broadened.

Pub Owners Welcome the Recognition

Keith Bott, who operates the Titanic Brewery alongside nine establishments throughout the Midlands, expressed satisfaction with the government’s approach. He noted that officials are “finally recognising the plight of the hospitality industry and trying to help” after a period of considerable strain.

“What I really liked in this announcement is they are recognising we need to look at a fairer tax system so we can all contribute to society,” Bott told the BBC.

Bott explained that pubs have endured a combination of challenges including employer National Insurance increases, the rising minimum wage, high inflation, and the climbing cost of living. He also highlighted that the sector remains “heavily taxed,” with approximately 35-40% of turnover flowing to the Treasury.

Furthermore, Bott pointed out that online retailers operating from warehouses contribute a “ridiculously low” amount in business rates compared to traditional establishments. He urged the government to extend its support by reducing the duty on draft beer, which represents a significant portion of pub sales.

Community Gyms Feel Excluded

Not everyone celebrated the announcement. Ruth Dawson, who manages HD3 Fitness Centre in Huddersfield, found herself among those “left out in the cold” by Burnham’s plans. Despite running a facility that “does exactly the kind of work the government says it wants to support,” her gym received no benefit from the new measures.

“If a pub can get support because it is the ‘heart of the community’, then so should we,” Dawson added.

Dawson described her business rates bill as “damaging” and identified it as “one of the biggest threats to our ability to keep operating.” She argued that community gyms maintaining elderly residents’ mobility and social connections are “every bit as vital to a High Street as a pub or a club.” Given the mounting pressure on the NHS and social care services from an ageing population, she believes fitness facilities deserve equal consideration. Dawson called on policymakers to reconsider and extend assistance to community leisure centres and fitness venues.

Cafes and Restaurants Question the Logic

Nick Smith, proprietor of the Ludoquist board game cafe and bar in Croydon, London, found the announcement reminiscent of “the trauma of Covid days.” He described the confusion that follows such declarations, noting that businesses must “spend days trawling websites to try to find out what they mean.”

Although Ludoquist holds a licence, Smith explained that it fails to satisfy the government’s definition of a “pub.” Consequently, he worries about being overlooked by the business rates package. “It is not inconceivable that I am in fact a pub. But I don’t think I am. No-one would describe me as a pub. I’m a cafe/bar/restaurant,” he clarified. Smith questioned why cafes and restaurants were excluded, stating, “Cafes aren’t being helped any more, nor are restaurants, so I don’t understand the logic of that.”

Nevertheless, Smith acknowledged that business rates represent only part of the challenge for his establishment. He advocated for the government to lower the current 20% VAT rate for hospitality businesses, aligning it with European nations including Germany, France, Spain, and Italy, which impose lower rates.

VAT Remains the Core Issue

Sam Lamiroy, who runs 45 Queen Street, a bar and restaurant in Penzance, shared similar sentiments. While viewing Burnham’s announcement as progress, Lamiroy agreed with Smith that “VAT is the real problem.” He calculated that the turnover for a typical pub or restaurant ranges between £500,000 and £1m, meaning the £1,000 saving from the business rates cut “won’t make much difference.”

“The 20% drop in business rates is really just lip service, it won’t affect whether we survive or not, the real lever to pull is help with VAT, dropping the rate from 20% to 10% as it is in the rest of Europe,” Lamiroy told the BBC.

Lamiroy also expressed concern that his Penzance establishment might not qualify as a “pub” under the support package terms. He emphasized the importance of hospitality venues as entry points for employment, noting that “these are the first jobs for a lot of young people, it is a springboard into work.”