BII CEO Appeals Against New Pub Business Rates

What follows is an open letter from Mike Clist CEO of the BII concerning the outrageous increase in rates which pubs are set face!!! He quite rightly calls upon all licencees to write to their MPs.

My Town

Mike Clist, Chief Executive BII

I currently live in Aldershot. In fact I was born here in the local cottage hospital some 64 years ago. My hometown has changed drastically over the years, from once a thriving army town to one which now resembles many others in the country – a town now filled with closed shops, charity shops, banks and cafés. Well-known stores like Marks and Spencer, Next, Top Shop, Burtons, Army and Navy, and Woolworths have long since disappeared. The Wellington Centre built in the seventies stands half-empty, with those remaining businesses struggling to survive.

Whilst I don’t blame the continuous increase in rates on the demise of every shop in the area, it has undoubtedly been a contributing factor. The one sector which has continued to invest – especially in the centre of Aldershot – is licensed premises. Yet despite over 50 pubs having closed and several more under threat, the rateable value of these premises has either continued to rise or remains at a high level from the last valuation.

There has been investment in and renovation of several pubs in Aldershot town centre, including a new Wetherspoons. The companies or private owners of these pubs have invested hundreds of thousands of pounds into a town centre which badly needed it. Not only have they improved the look of these premises, they also contribute to the local economy – employing many staff and helping unemployment levels stay below the national average.

So how do the new 2017 rateable values encourage the owners of these premises and ensure they carry on investing and employing local people? Well let’s look at the pubs in the town centre area that have invested recently:

RV Now RV 1/4/17 Inc/Decrease
Wetherspoons £30,000 £126,500 Up 321%
Goose £88,250 £87,500 Down 1%
Funky End £22,750 £26,500 Up 17%
Queen Victoria £50,000 £72,500 Up 45%
Alexander £10,500 £14,000 Up 25%

It’s not just pubs. The following restaurant chains have invested heavily in the new Westgate Centre and had their rateable values set during the last seven years. Despite having just been valued, compared to the pubs above, they have all seen rate rises as well. One operator has already pulled out of the centre.

Toby Carvery £78,000 £92,000 Up 15%
Frankie & Bennie £76,000 £89,500 Up 18%
Prezzo £61,500 £72,000 Up 17%

By contrast, Amazon (which earlier this month reported $748m in profits for the final quarter of 2016 and is already under fire over allegations of tax avoidance) is expected to see its business rates fall at six of its nine major distribution centres. Whilst the rates for Amazon’s London head office will increase, the overall bill for Amazon’s nine UK warehouses is set to fall by more than £140,000.

Pubs pay nearly £500m more than they would if they were rated on a level commensurate with Amazon. You will hear Ministers say that 75% of business rates will not change but many are already higher than they should be, with the remaining 25% financing the one billion in extra rates expected from this 2017 revaluation – especially in cities and the South.

So why don’t we all just appeal the new rates when they come out? Well, the government wants to cut down on the number of appeals. It has been rumoured that they want the right to dismiss appeals against incorrect valuations which are deemed to be within the bounds of ‘reasonable professional judgement’ or a margin of error. This margin of error has not yet been disclosed, but experts say it could be as much as 15%. So no great hope there then. Even if an appeal is granted, the process is slow and quite often comes too late for the business to survive.

Even Mary Portas (the Government appointed saviour of the high street!) is at odds with her former employers on this issue. Speaking of the new business rates, she said they were ‘madness’ and risked killing off a third of independent businesses. The controversial revaluation would be the worst blow to small businesses since the 2008 crash.

The rating system of this country is close to being broken. As local shopping centres across the country continue to fail, the Government needs to realise you cannot make up for those losses by constantly upping the amount remaining businesses pay. It is time to look at ratings again and adjust them so that the online retailers, who turn over millions of pounds, pay the rates they should and local businesses are given a chance to survive.

The momentum for change is growing, newspapers, MP’s and Ministers are speaking out on this issue. Please join the campaign now by writing to your MP today and become someone like me, just a local lad who wants to save his town, his shops and most of all his pubs.

Mike Clist
CEO, British Institute of Innkeeping (BII)

 

If you are concerned about these business rates increases, and would like to raise your concerns with your local MP, here’s a template letter for you to quickly download, fill in and send off:

The name and contact details of your local MP can be found HERE.