Up next in 10
British pubs are facing another onslaught of taxes, targeting businesses with 'character properties' or scenic views.
Other criteria include children's play areas, ample parking and the serving of daytime coffee.
As two pubs a day shut, City AM's Felix Armstrong answers the question: how much more can these hospitality businesses take?
Get more of City AM 👇
🌐 http://www.cityam.com
X(formerly Twitter): http://twitter.com/CityAM
Facebook: http://www.facebook.com/cityam
Instagram: http://www.instagram.com/city_am
LinkedIn: http://www.linkedin.com/company/cityam
Show More Show Less View Video Transcript
0:00
Welcome back to Business as Usual
0:02
Now, as if it hasn't been a tough enough parliament for Britain's pubs
0:06
the Treasury looks set to impose even further costs on the struggling hospitality sector
0:11
New criteria to assess how much pubs will pay in business rates has been criticised by opposition MPs
0:17
and leading industry voices, calling it a nice pubs tax. Now, Felix Armstrong, our retail reporter, basically our pub reporter at this point, joins us
0:27
Now, Felix, what are the criteria the government are going to use to tax pubs even more
0:34
So, if you are running a pub, you better not be in a prominent out-of-town or rural location
0:40
You better not be in an attractive location, such as a river frontage or with a nice view
0:45
You better not have an open-plan bar area or letable rooms with an en suite
0:49
or a children's play area or ample parking. Ample parking? So, the dream here is it's a brutalist pub
0:57
surrounded by buildings you're turning the barbican into a pub it's the middle of the barbican
1:01
children are not allowed the menus are very cheap you can't sell food
1:06
at two parking places it's like the opposite of the pandemic rules with Scott Cheggs also breakfast
1:09
daytime coffee and late opening hours so you can't sell coffee we've got to get rid
1:14
of the coffee machine so it should be open between maybe 6 and 8pm yeah yeah
1:19
because you're not allowed to open late what about instant coffee does that instant coffee daytime coffee don know maybe that includes instant I mean what has the reaction been to this How are the pub bosses taking it Yeah I mean you can imagine can you
1:33
So I spoke to Leon Burton, who is a managing director at a small pub chain
1:40
called The Grill Pub, and he has pubs in quite rural areas. And he said this penalises the pubs
1:45
that have worked hardest to become destinations. They've put up all these amenities
1:49
to become the heart of often quite rural locations, where that is the centre of that community
1:55
and they feel that they are now being penalised for bringing people together in that way
2:00
I suppose to take it back to first principles, why are these pubs being arbitrarily punished for nice attributes
2:06
So the business rate system is based on the value of your building, basically
2:10
So I guess the government are trying to find out a way of determining what makes a building valuable
2:17
And I guess in a sense, if you've got a big car park, if you've got en suites, if you've got a nice open plan bar
2:22
that does put the value of your property up. But how does the value of the property impact how much money you make
2:29
Whether my pub's worth 100,000 or a million, I mean, what difference does that make in my take at the end of the week
2:36
That's a good point. And often, you know, these rural pubs will have maybe listed
2:40
you know, very kind of grand buildings, but, you know, they may have only, you know
2:43
five old boys through the door every night. They're not necessarily taking huge amounts each night
2:48
It does lay out a pretty perverse scenario where you end up with a situation where some of the most popular pubs are also the ones closing down which feels insane like an anti system This is the farmer inheritance tax all over again It like you have a big asset that worth an awful lot of money
3:01
but it doesn't generate an awful lot of cash, right? And you're being taxed on an asset
3:07
Before I get too angry about that, Felix, in other pub news
3:11
several hospitality leaders have called on the government to reverse its increases
3:14
to employ a national insurance contributions, which pubs say making it harder
3:19
to hire young people. Yeah, so this isn't any happier a story. But of course, we're coming off
3:24
the back of the Milburner review into youth unemployment, which found that we're, you know
3:29
tumbling towards an economic catastrophe, which he said is in part due to the hikes to national
3:33
insurance and minimum wages. And yeah, pub bosses have rounded on this. I was in touch with Tim
3:39
Martin, the boss of JD Weatherspoon, who again, interestingly said that the real damage of these
3:46
wage hikes is on less affluent, more rural towns where he said, you know, these pubs are more
3:53
likely to have to pass on the higher wages that they're, higher costs that they're incurring
3:59
because of having to pay their staff more into, you know, more expensive pipes, more expensive
4:05
pork scratchings. And these people in rural communities are going to be able to stomach
4:10
that a lot less. And it's really bleak on a demographic level as well, because if you are
4:14
for a young person say age between 16 to 18 or 18 to 20
4:18
in these areas you also less attractive as a hire for pubs which traditionally would have hired them in areas that maybe wouldn have a huge number of jobs because of the minimum wage which has gone up at the same time And it where you cut your teeth
4:29
You know, my first job, one of my first jobs, my first job was a lifeguard, actually. But like one of my bar job at uni was in a hotel
4:36
was tending bar, you know, pouring pints and stuff. This is where young people first get a taste of work
4:42
And those young people now also going to be competing with out-of-work 20-something neats as well
4:47
which we're seeing. So it's just an awful situation, which is hitting everyone in that 10-year age range
4:53
Yeah. I mean, it's pretty dire again that I feel like I just come in here and spread gloom
4:58
Yeah, you are a correspondent for gloom. The last thing I'm going to say on this pubs tax, this nice pubs tax
5:04
is I think when you pay regularly £8 a pint around here in the city
5:09
I expect to be in quite a nice place, right? I don't mind paying £8 a pint now and then because it's nice
5:17
but it should be nice. And like men's toilets in pubs are traditionally awful
5:22
There are like war crimes going on in there. And I regularly tell sort of pub owners and stuff like that
5:28
like, all right, charge me eight, nine quid a pint, but at least have a sort of clean toilet for us to use
5:33
Well, it is bleak when the prices are going up and then they still can't even afford to hire people. So it's just not that good an economic engine
5:39
while being a less good experience. It's just awful. And on that note, thank you very much for coming in, Felix
5:43
Thank you very much. Thank you, Felix. you
News