Last orders for Starmer: Labour’s charges reforms pose an existential disaster for pubs, says MAGGIE PAGANO

Two days before Keir Starmer became Prime Minister, he visited one of the warehouses owned by Steve Perez, chief executive and founder of Global Brands. It was a friendly meeting.

They shot the breeze and shook hands, with the Prime Minister-in-waiting promising that Labour would support the hospitality industry, business rates reform was on the table, and that Perez had ‘nothing to fear from Labour’.

How times have changed. Perez now regrets ever hosting Starmer. ‘He looked me in the eye and promised help. He lied to my face,’ he says.

He says what has happened is that the Budget business rates reforms will destroy restaurants, pubs, bars and hotels.

Bigger businesses like his will weather the storm. But Perez warns that smaller publicans will lose not only their livelihoods, but their homes. 

Inevitably, local communities will suffer too when a pub closes, as they are so often the heart and soul of a place, particularly in rural areas.

Pubaggedon: UK Hospitality estimates the hit on small venues from the rises in business rates bills is £318m over three years, with an average pub paying £12,900 more over that period

Labour did indeed put business rates on the table. But the table turned out to be a wonky three-legged one, and one which is having huge unintended consequences.

Rather than opt for the 20p discount, the Government chose a much lower discount at 5p. Combine this with the recent revaluation of properties which has sent values sky-high, and you have a perfect storm.

Perez reckons the recent rate changes will mean 85 per cent of pubs face higher rates from April, with an average rise of 78 per cent.

What’s more, UK Hospitality estimates the hit on all small venues from the rises in business rates bills is £318million over three years, with an average pub paying £12,900 more over that period and hotels around £205,200 more.

Yet these increases, it points out, fall dramatically to just 16 per cent for big distribution warehouses, used by online giants, and 4 per cent for the larger supermarkets. 

Ironically, one of Rachel Reeves’ Budget ambitions was to capture higher business rates from larger firms while helping smaller ones like pubs and shops.

Clearly the Treasury boffins got their sums wrong, again. This week Greene King boss and chairman of the British Beer and Pub Association, Nick Mackenzie, warned hundreds of pubs face closure, including his own tenanted pub partners.

The crisis is existential, he says, with some pubs facing increases of over 90 per cent.

One pub operator in a village near Leighton Buzzard, Buckinghamshire, which had a rateable value of £10,500 in 2023, will see that soar to £70,000 next year – a 566.67 per cent increase.

These are astonishing rises, enough to send a small business suffering from higher national insurance contributions and minimum wage costs to the wall.

Paradoxically, these industry costs are hitting the poorest and youngest the hardest, with many pub chains employing older people rather than the young.

What can be done? Well, UK Hospitality has written to MPs correcting Labour’s claims that it is helping the industry, and hopes to persuade the Government to freeze rateable values at 2023 levels and hike the business discount to 20p.

Perez suggests cutting VAT on hospitality to bring it in line with the European average of 10 per cent to 13 per cent if ‘Labour wants a thriving hospitality sector rather than boarded-up pubs and empty high streets.’

Oh, and he’s joining the grassroots campaign spreading like wildfire among landlords who are closing their doors to Labour MPs in protest.

His venues – The Red Lion, Peak Edge Hotel and Casa Hotel, his HQ in Chesterfield – will no longer welcome Labour MPs.

Traders, he says, like farmers hit by inheritance tax changes, have never been so angry.

That’s a pretty lethal combination.

Drugs warning

Here’s an idea to rattle cages. Wes Streeting, the Health Secretary, should invite Emma Walmsley, the outgoing boss of GSK, to advise him on reforms to the NHS, or chair the health service.

After listening to her latest radio interview, in which she speaks frankly about how the US is a better place to invest than the UK, how US maternity care is so different (in other words superior) and how the poor British diet is behind so many of our obesity problems, it’s clear she is more than capable of telling home truths.

Her broad experience could be just the tonic needed to revitalise the NHS.