Pubs: Business Rates

17th January 2019

On Tuesday, Anne Main MP held a debate in Parliament to argue for the revision of the business rates system that affects small businesses on the high street. This important debate is part of Anne’s longstanding campaign to stand up for the pubs and small businesses of St Albans.

St Albans is famous for its pubs and Anne is proud to represent a constituency that is home to so many brilliant independent businesses. Unfortunately, in recent years, areas like St Albans have seen many small pubs and other shops close due to sky-high business rates. Anne has consistently fought for a fairer rate to protect these businesses that are the true backbone of St Albans.

The Chancellor announced in the Autumn Budget in October last year that he was reducing business rates by a third, but only helping those with a rateable value of less than £51,000 a year. Sadly, this does not include most pubs in St Albans.

Anne visited St Albans high street last November with the campaign group, Save St Albans Pubs, and went on a tour of several pubs that have faced huge rate increases.

Anne opened the debate by urging the Minister that he needs to listen carefully to pub owners up and down the country who are evidently struggling. The business rate formula that was supposed to help pubs has backfired and means a hike in rates for small independent chains. Mrs Main warned that this could lead to a “cut to staff members, or even worse, close their businesses altogether.”

Anne argued that although this is a step in the right direction for many pubs, it is because they escape this hit by cross-subsidising in other areas and that “small independent pubs, often run by one or two people who have put their lifeblood into those pubs, that are suffering. Those people are the ones whose voices need to be heard today.”

Mrs Main also highlighted an additional problem affecting pubs. There has been a progressive trend of commercial space becoming residential space and sadly, this is affecting businesses across St Albans. Anne said, “This is a double whammy for pubs. […] the new rate simply provides a cliff edge that penalises successful businesses in areas plagued by high property value. We must devise a system that helps all small business and pubs to thrive, not just the ones with low retail value.”

Mrs Main went on to emphasise the faults of the 2017 business formula, explaining that the rateable value, driven by the pub’s turnover, is affected by the property values in the area. Therefore, “many pubs in St Albans that have been hit the hardest due to high property values”. Anne lamented how these small business operators cannot make a profit due to an arbitrary taxation system.

Other members were quick to show support in this debate and it was clear that a cross-party group of MPs share Mrs Main’s concerns.

Anne said that “the formula must be revised. The current method […] is a barrier to new investment […] and we have to tackle that issue and find a fairer formula.”

Mrs Main referred to CAMRA, based in St Albans, and praised their submission to the Chancellor ahead of the Budget in September last year. The campaign group call for a full review of the business rate system in order to tackle the unfair penalisation of property-based businesses like pubs.

Save St Albans pubs are calling for the 1/3 reduction for businesses with rates below £51,000 should apply to all businesses for the first £51,000 of their rates.

Mrs Main pointed out that she, “welcomes the efforts of the Government to cut business rates and further, freeze beer duty however, they must see that those who don’t benefit from the rates relief are struggling desperately.”

Mrs Main gave a stark reminder to the Minister that “time is running out for pubs, three years to challenge a business rate is far too long.”

She added that pubs in the constituency would “be delighted to welcome the Minister to their pubs” and just show how the model must be “altered in line with a fairer system that respects the heritage pubs that are the lifeblood of constituencies.”

The Minister responded that although he recognised that “pubs lie at the heart of our communities” he did acknowledge that there were “undoubtedly great pressures on pubs.”

Mr Stride explained that the Government have “changed the uprating from the RPI to CPI and that will lower the level of business rates right across the pubs sector, irrespective of the size of the particular establishment.”

Mrs Main pressed again and asked why the “rates of one pub are hugely increased and those or another, which is not making so much investment and effort in the community, are cut?”

Anne remains hot on the topic and stressed that the Minister “commits to coming to St Albans.” Mrs Main made it clear that it is essential that the Government listen to the people who are running these businesses and they need to come to St Albans. 

The Minister ended the debate agreeing to Mrs Main’s invitation to meet publicans from St Albans. Anne made it ardently clear that she will be keeping up the pressure on the Treasury to review the rates system and continue to stand up for the pubs in St Albans. Anne looks forward to driving this campaign forward with a visit from the Minister soon.

Anne Main MP calls for business rate review in pubs debate.

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