‘A Nightmare earlier than Christmas’: Hospitality is being crushed by Labour’s botched enterprise charges reform, says business chief

Kate Nicholls is chair of UK Hospitality

Christmas should be a time of cheer, but last month’s Budget has instead left hospitality businesses at their wits’ end worrying about the looming business rates car crash.

In just a few months, local pubs, neighbourhood restaurants and coastal hotels, to name a few, will be hit with increases to their business rates running into the thousands.

UK Hospitality boss Kate Nicholls

For many of these already cash-strapped businesses, the eye-watering increases have become their own nightmare before Christmas.

Even after the Government’s transitional relief package, an average pub will see their rates increase by £1,400 next year. In three years, they’ll have paid an extra £12,400.

For a hotel, it’ll be an extra £28,900 next year. That’s one staff member sadly let go. By year three, it’s an extra £111,300. In total, an additional £205,200 over three years.

That’s probably four people losing their jobs – young people embarking on a career in hospitality, a parent juggling childcare, a son or daughter with caring responsibilities for their parents. These are the people disproportionately hit by these job losses – and the exact people the Government wants to help back into work.

Those eye-watering sums will be a 76 per cent increase for pubs and a 115 per cent increase for hotels. These are not the sort of sums you’ll just find down the back of the sofa.

These are hikes even after the £4.3billion transitional relief package the Government has introduced – which, it should be noted, is for the entire economy, not just hospitality. Yes, it caps how much bills can go up by, but an increase is still an increase.

Even the Chancellor last week confirmed that the sector’s overall business rates bill would increase by 4 per cent.

We told Ministers and officials that property revaluations would rise significantly, due to comparisons with Covid, and that was why the Government had to apply the maximum discount for hospitality properties.

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The local pub is not Amazon. It doesn’t have turnover that runs into the hundreds of millions, to help out on a rainy day.

For the record, those online giants are only seeing business rates for their distribution warehouses increase by 16 per cent.

These are the very businesses that Labour committed to have pay their fair share through a new system that will, and I quote from the manifesto, ‘level the playing field between the high street and online giants’.

That is categorically not happening. Online giants, office blocks and out-of-town supermarkets are getting a better deal than your favourite pub, restaurant or café.

We warned the Treasury for months that this could be the case. They chose a different – misguided – path. The result? This Budget has widened the gap between the high street and big online businesses, when it had the explicit aim of doing the opposite.

It affects all of us. Business closures will accelerate, more jobs will be lost and the price of these increases will inevitably be passed onto us, the consumer.

Making life more affordable does not start with Government costs ratchetting up the cost of a pint, a meal or a hotel stay.

The Government has the power to fix this. They should increase the business rates discount for hospitality to 20p or freeze rateable values for hospitality businesses at 2023 levels. This would give them time to actually deliver its manifesto promise.

Help us rebuild and revive our high streets. You’ll miss them when they’re gone.