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Buffeted by business rates, employment costs and property revaluations - can Britain's boozers survive multiple Labour onslaughts?
In this episode of Week in Business, Editor-in-Chief Christian May discusses the major strains on pubs in the UK.
#news #economy #politics #pubs #uknews
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0:00
Whether it's your after-work favorite or
0:01
your home-local, whether you drink or
0:03
not, everyone has a favorite pub. But
0:06
the sector is facing a crisis and we
0:08
know whose fault it is. We also know
0:10
that the challenges facing British pubs
0:12
reflect a much bigger problem in the
0:14
relationship between the government and
0:16
the private sector. Welcome back to the
0:18
week in business with me, Christian May.
0:23
January is traditionally a tough time
0:25
for pubs and hospitality after an
0:27
indulgent December, but this year the
0:29
New Year blues came with an extra slap
0:31
in the face after the government
0:33
launched a revaluation of
0:35
bricks-and-mortar businesses that in
0:37
many cases has led to a dramatic spike
0:39
in tax bills by business rates. Pubs are
0:42
facing demands for thousands of pounds
0:44
in additional business taxes. Some are
0:47
seeing the tax double. It's not unusual
0:49
under the new system for the bill to
0:50
rise from 50,000 pounds to over 100,000
0:53
pounds. That's exactly what's happening
0:55
to chef and pub owner Tom Kerridge, now
0:57
a leading voice in the fight to save
0:59
pubs. It would perhaps be churlish to
1:01
point out that Mr. Kerridge was among a
1:03
handful of business leaders to endorse
1:05
Labour before the last election.
1:07
Of course, this new business rates
1:09
regime comes on top of a massive new
1:11
taxes and cost increases that hit pubs
1:13
hard ever since the national insurance
1:15
and minimum wage increases. On top of
1:18
that, you have high energy costs,
1:19
inflation, and weak consumer confidence.
1:22
Oh, and don't forget the Employment
1:24
Rights Act which adds yet more pain to
1:26
small employers. 25 years ago, there
1:28
were 60,000 pubs in the UK. Today, there
1:31
are 45,000 and currently one pub closes
1:35
every single day. Now, later today, the
1:38
pubs of Bow Lane near me here and
1:40
Leadenhall Market uh elsewhere in the
1:42
city will probably be rammed. It is
1:44
Thursday, after all, but across the
1:46
country, the picture is very different.
1:48
Rural pubs in particular rely on
1:50
regulars and food service and very often
1:53
people being prepared to get in their
1:54
car and make the trip. Now, the
1:56
government's planned crackdown on
1:58
drink-driving laws means that just a
2:00
single pint could soon put you over the
2:02
limit which will inevitably lead to more
2:04
financial woes for rural pubs in
2:06
particular. Not necessarily because
2:08
people will stop driving to the pub if
2:10
they can't have a glass of wine when
2:11
they get there, but because booze is a
2:13
high-margin part of the business model.
2:15
And 100 fewer pints sold each week will
2:18
be felt on an already squeezed bottom
2:20
line. Now, pushed on all of this,
2:22
particularly on the punishing business
2:24
rates increases, ministers and Prime
2:26
Minister himself waffle about supporting
2:29
the sector with new rules about pubs
2:31
being allowed to stay open longer and
2:32
cutting the red tape for event licenses.
2:35
These are measures dismissed as an
2:36
absolute joke by landlords. Now, with
2:39
Labour MPs inundated by distressed
2:42
constituents, it looks as if the
2:43
Chancellor will have to make some kind
2:45
of U-turn. There's already talk of mass
2:47
protests of the kind organized by
2:49
farmers when the government ripped up
2:51
their future by hiking inheritance tax
2:53
on family farms. After months of agony
2:56
and stress for farmers, the government
2:58
caved in and performed a partial U-turn.
3:01
Now, will we see something similar
3:02
happen with pubs? I hope so. But I have
3:05
to say, this is no way to run a country
3:07
and it's no way to treat businesses. In
3:09
fact, it's no way to treat people.
3:11
Nobody in this government has ever had
3:13
to stay up late going through the books,
3:15
worrying about payroll, worrying about
3:17
breaking even. This lack of experience
3:20
leads to a lack of empathy and
3:21
ultimately it leads to bad policy. We
3:24
saw it in the first budget with the hike
3:26
to employment taxes. We saw it with the
3:28
family farm and family business
3:29
inheritance tax changes. We're seeing it
3:31
with the business rates debacle.
3:33
Ministers from the Prime Minister down
3:35
do not understand the consequences of
3:38
their decisions. They do not understand
3:40
the reality of their own policies.
3:43
Labour promised to be the most
3:45
pro-business government this country has
3:47
ever had. What did they think that
3:49
meant? Really, what did they mean by
3:51
that? Because their taxes and their red
3:53
tape and regulation and arrogance mean
3:55
that I think this is in fact the most
3:57
anti-business government this country
4:00
has ever had, certainly in my lifetime.
4:02
Whether people run pubs, restaurants,
4:04
hotels, farms, small engineering firms,
4:07
family businesses, or whatever size and
4:09
in whatever sector, they are the
4:11
lifeblood of our economy, powering and
4:13
underpinning everything we claim to want
4:15
as a country: jobs, growth, and tax
4:17
revenue. Unfortunately, the government
4:19
sees only that last one as a source of
4:21
tax, a way of funding higher welfare
4:24
spending. Unemployment is rising, growth
4:27
is stagnant, confidence is evaporating,
4:30
the tax burden is increasing. All of
4:32
those lines are going in the wrong
4:34
direction. And it's only when the Prime
4:36
Minister faces a political headache, the
4:38
threat of rebellious MPs, that he orders
4:40
a rethink. It's a disgrace, pure and
4:42
simple, and it gets me so angry that if
4:44
it wasn't quite so early in the day, I
4:47
would head to the nearest pub and order
4:48
a stiff drink. Starmer says he
4:50
understands all of this. He says he
4:52
understands the cost of living pressures
4:54
facing people and businesses. He says he
4:56
has a plan and that this is the year
4:57
when people will start to feel it.
5:00
Though he somehow manages to make that
5:01
sound like a threat.
5:03
It's depressing that we have to start
5:04
the year with yet another sector
5:06
hammered by government threatening
5:08
protest and with Labour MPs forced to
5:10
relay business worries to negligent
5:12
ministers, but that's where we are and
5:14
that's what you get when ministers
5:16
simply do not understand business.
5:19
That's it from me this week. Do stay
5:21
up-to-date and in the know with the City
5:23
A.M. app and on cityam.com and I will
5:25
see you next week.
5:31
[Music]
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