Key facts
- Prime Minister Andy Burnham announced a £100 million policy to reduce business rates by 20% for pubs, clubs, and live music venues.
- The measure aims to support the high street and is expected to save businesses around £1,000 annually on average.
- Pub owners described the relief as insufficient, highlighting larger costs such as VAT and staffing.
- Campaigners are advocating for a reduction in VAT from 20% to 10% for the hospitality sector.
Prime Minister Andy Burnham has introduced a £100 million policy to reduce business rates by 20% for pubs, clubs, and live music venues, aiming to support the high street. However, industry figures have met the announcement with skepticism, deeming the relief insufficient to address the significant financial pressures faced by the sector.
Dan Smith, owner of The Red Lion pub in Derbyshire, noted that business rates constitute a small fraction of the cost of a typical order, with VAT being a far larger expense. He stated that while the gesture is appreciated, it is a "small snippet" and highlighted the complexity of current business rate calculations.
Colm O’Leary, director at Packed House, a consultancy for hospitality businesses, echoed these sentiments, describing the benefit as a "fart in the wind" compared to the scale of other costs. He indicated that for a business with a £1 million turnover, the saving from this policy would be around £1,000 annually, while other costs such as duty on alcohol, staffing, and utilities remain high.
Hospitality businesses are instead advocating for a reduction in VAT from 20% to 10%, a measure that Burnham himself supported when he was mayor of Manchester. This proposed VAT cut is estimated to cost the Treasury approximately £10 billion.