When the announcement arrived this morning that Andy Burnham is cutting business rates for pubs, social clubs and live music venues by 20 per cent from next April, my first thought was: how much difference will this make? I run three village pubs in Oxfordshire with my wife. Of course, a £1,100 rate cut is welcome. But on the margins that pubs are running it is, very much, Nero fiddling while Rome burns.
Most pubs are making something like three pence in profit for every pound of turnover on beer sales. Staff wages and National Insurance routinely take 25 to 35 per cent of our turnover
At the beginning of the year, under Starmer, the revaluation of business rates felt like a ransom note. Average bills were set to climb sharply. More than 5,000 pubs saw their valuations double. The British Beer and Pub Association was warning of six closures a day. I wrote here for Coffee House at the time that the government was talking about growth while slamming on the brakes.
The partial 15 per cent rate relief announced by the government in January was a clumsy, badly handled U-turn that did nothing to fix the underlying system. In fact it managed to make everything deeply confusing and far worse, with pubs left unsure how the partial relief applied to their new higher valuations.
