Fears businesses could close before rates relief come into force as PM warned plan is a ‘drop in the ocean’
Andy Burnham has been warned his cut business rates for pubs, clubs and live music venues “doesn’t go far enough”, as the new prime minister is accused of using the plan as a political stunt.
Mr Burnham announced the 20 per cent reduction in business rates on Thursday, promising around 32,000 businesses would benefit and the typical pub could be expected to save around £1,100 annually.
But celebrity chef and publican Tom Kerridge was amongst the hospitality industry leaders to hit out at the announcement, warning the savings passed on to businesses “won’t really make a difference”.
The TV chef had previously led a nationwide campaign calling for hospitality VAT to be cut to 10 per cent, under the banner “VAT’s the Problem”.
Speaking about the announcement, he said: “It doesn’t go far enough but it does show that there is an understanding that hospitality needs a hand, especially smaller venues.”
Great British Menu winner Nick Beardshaw branded the move a “political manoeuvre”, which he said was “an absolute drop in the ocean” when it comes to helping the hospitality industry.
He said the policy was “not enough to save any businesses”, and warned many would have closed their doors by April when the measure is due to come in.
“While it is a positive thing, I feel like it’s just a bit of a political manoeuvre designed to take a bit of heat away from the noise that hospitality is making,” he said.
“It’s an absolute drop in the ocean. Business rates are normally between 2 per cent and 4 per cent of turnover in these businesses, so the reduction represents a 0.4 per cent to 0.8 per cent reduction in total costs.
“Not enough to save any businesses, as is implied in his statement about not wanting to see any more of these businesses boarded up. Many of them won’t make it to next April.”
Mr Burnham said it was time to support vanishing “cherished local spaces” as he announced the measure, which comes amid a policy blitz to provide “breathing space” to the public and businesses as they experience cost pressures.
The move will cost around £100m a year and funds are planned to be raised for it by cutting business rate relief for vape shops and cracking down on online businesses that fail to pay VAT.
The changes were largely welcomed by the sector, but some businesses questioned how much impact they would have, while those not covered called for further help.
Steve Perez, founder of Global Brands soft drinks firm and owner of two hotels in the Peak District called the rates cut “tiny”.
Mr Perez told the BBC: “Obviously it is welcome but it won’t make any material difference to any pub.”
He added: “It is a little like the supermarket putting up prices and then saying they are reducing them.”
His comments were echoed by Iain Hoskins who runs the Ma Pub Group in Liverpool.
Mr Hoskins said: “I don’t want to sound ungrateful but the increases we have had are so huge in the last year that now chipping away at some of them we are not getting better value then we had before.”
Since entering Downing Street on Monday, Mr Burnham has unveiled plans to remove VAT from electricity bills and reinstate a £2 cap on single bus fares across England.
Chief Secretary to the Treasury Emma Reynolds insisted the policy is fully funded, despite both sources of revenue being described as subject to review or consultation.
But the Conservatives said Mr Burnham must detail how he will pay for his policies.
Tory shadow business secretary Andrew Griffith said: “Whilst any support for Britain’s hard-pressed businesses is welcome, once again this Government has been found wanting on both the detail and funding for this policy.”
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