Britain’s high streets face losing some of their most popular pubs and restaurants because of big rises in business rates, leading operators have warned the Government.
According to The Times, companies including the owners of Pizza Express, Greene King, Wagamama, All Bar One and Slug & Lettuce have written to the Chancellor Philip Hammond to ask him to rethink a plan under which some outlets will be hit with a 42% increase in their rates this year.
However, leading analyst Simon French at Cenkos said that unfortunately he sees any such intervention is unlikely to succeed. He stressed that the Government and local authorities were in need of the additional income and that while many operators would be hit by the rise, 75% of outlets would see a reduction or no change to their bill.
There have been complaints from across the business world over the rates, which have also caused concern among Tory MPs worried about closures on high streets in their constituencies.
Independent outlets feel particularly vulnerable and businesses are asking that Mr Hammond use his budget next month to reduce the huge increases.
Pub and restaurant chains directly employing more than a million people have signed a letter to the chancellor, warning that the rises some are facing will damage their ability to help to make a success of Brexit.
They state that many companies in the hospitality sector were “not prepared for the significant rises resulting from the latest revaluation”.
“This will add a further £300m to £500m in additional cost in the hospitality sector,” they write. “Margins in our sector are already under intense pressure, due to the cumulative impact of increased wage, training and regulatory costs and there is a very real danger that these increases will result in a freeze in investment and a scaling back of new openings and job creation.
“We have already seen evidence of outlets closing as a result of the planned increase. Modern pubs, bars and restaurants are valuable social, economic and community assets — they contribute to our thriving tourism sector, high street regeneration and attract and support significant inward investment.
“As such, they are well placed to capitalise on the opportunities presented by Brexit, but they will not be able to do so if hampered by unsustainable additional costs.
“We would urge you to consider reviewing the transitional relief provisions and the introduction of sector-specific hospitality retail relief to help businesses plan and invest with confidence.”
The new business rates will apply from April. Ministers have also lifted the cap on the amount by which bills can increase in the first year from 12.5 per cent to 42 per cent. Some pub landlords have claimed that they are facing eventual increases of as much as 516 per cent.
All businesses with properties that have a so-called rateable value above £12,000 have to pay business rates. The last time rates were set was seven years ago, but property price changes since then have led to big winners and losers. Rates will fall for 920,000 businesses, remain the same for another 420,000, and increase for 510,000.
A spokesman for the Department for Communities and Local Government told The Times: “The great British pub is a national asset, providing thousands of jobs and boosting the economy by £21bn a year. The method of valuing pubs was agreed by the five major trade bodies and has not changed.
“Following the revaluation, three quarters of properties will see no change or even a fall in their bills, and the small minority of businesses that face an increase will benefit from our £3.6bn transitional relief scheme.”