Rachel Reeves refuses to bail out hospitality venues as 2,000 face closure after major U-turn on pubs
Rachel Reeves is resisting growing Cabinet pressure to offer business rates support to the wider hospitality sector.
The Treasury signaled a major U-turn on pubs last week after warnings that hundreds could be forced to close following a major rise in interest rates.
But other sectors such as cafes, restaurants and hotels, as well as music and theater venues and independent shops, will also be hit hard, industry leaders say.
They warned that six such venues would close without support every day next year; more than 2,000 in total.
Kate Nicholls, chief executive of UK Hospitality, said: ‘The whole hospitality problem needs a complete hospitality solution.’
The trade group said the average hotel would see its business rates bill rise by £28,900 in the first year and a total of £205,200 over three years.
The average pub faces paying £1,400 a year more initially and £12,900 more over three years.
The UK Department of Hospitality is calling on ministers to quadruple the level of discount on business rates to the maximum possible for hospitality firms.
Despite more than 2,000 pubs facing closure due to business rates rises, Rachel Reeves continues to resist mounting pressure from the Cabinet to offer support to struggling hospitality venues
A Government source said yesterday that Downing Street was pushing for a wider package to avoid further debilitating U-turns.
‘There is a view that we want to do this once and do it right,’ the source said.
Business Secretary Peter Kyle, who will discuss the issue with the Chancellor this week, also hinted that support should not be limited to pubs.
He told the BBC that the government had been in ‘listening mode’ on the issue for some time and that discussions were held with the hospitality industry in Birmingham last week.
Mr Kyle said discussions with the Treasury were ‘robust’ but at ‘university level’. But the Treasury insisted there were no plans yet to extend business rates relief to other sectors.
Hotels and restaurants could benefit from wider licensing reforms but help with fees would be ‘pub specific’, a source said.
East Thanet MP Polly Billington, chair of Labour’s coastal MPs group, said ministers were ‘having real conversations with us’ about support for small hospitality and retail businesses.
It came as Labor was accused of a ‘depraved desire’ to destroy pubs.
Business rates reform puts further pressure on a sector already hit by high alcohol duty, minimum wages, National Insurance, VAT, corporation tax, green energy duties, packaging duties and inheritance tax, a leading brewery boss has said.
Richard Bailey, Chairman of British Independent Family Brewers, said: ‘This government’s measures to increase tax and the regulatory burden on landlords and pubs will destroy this beloved and critical industry.
‘You can only assume from the government’s recent actions and policy decisions that there is an immoral desire to dismantle them, eliminate jobs and destroy our communities.’
He said going to the pub was ‘becoming increasingly unaffordable’ and added: ‘With ever-increasing taxes and legislation your local may not even be open every day.
‘Pubs are being used as whipping boys by Her Majesty’s Revenue and Customs and Treasury, who are deaf to the voices of industry warning of distress, closure and cultural extinction.’
Nearly 1,500 pubs banned Labor MPs from entering their premises after the budget. Mr Bailey, who is also chairman of brewery Daniel Thwaites, said: ‘This political leadership seems to have completely overlooked the vital role pubs play – or perhaps they just don’t really care.’
