3,788 pubs could be at risk of closure, if the Chancellor does not extend the £1,000 sector relief rate for pubs, according to a new report commissioned by the British Beer & Pub Association (BBPA).
Even if just one fifth of those pubs at risk were to close, it would equate to an additional 750 pubs closing on top of the current three pubs a day (upwards of 1,000 a year) that close their doors for good due to a range of cost pressures, including beer duty, business rates and VAT.
The report, produced by leading economics consultancy Europe Economics, also found that over 20,000 full time jobs and almost 30,000 part time jobs employed by the pubs at risk of closure could be lost too. This means that If just one fifth of the pubs at risk were to close, 4,000 full time jobs and 6,000 part time jobs would be lost for good.
Small community and rural pubs would be the most affected by a failure from the Chancellor to extend the rate relief for pubs. Almost three quarters (73%) of community pubs with turnover of around £4,000 per week and nearly one third (30%) of rural pubs with turnover of around £5,000 per week would be at most risk of closure as defined by Europe Economics.
At a regional level, the South East would be the worst hit if the relief rate for pubs was not extended or made permanent, where pubs who would be at risk currently support 4,700 full time jobs and 5,700 part time jobs. London and the North East would be the least affected.
The report includes a proposal to introduce a relief to pubs who offer community services. Community pubs are more at risk financially from a failure to extend the £1,000 sector relief rate and so additional relief or adjustment to business rates for pubs like these would help improve their viability. It would also recognise the valuable role that pubs play in boosting community cohesion.
The report has also called for a delay in the revaluation of pub premises that have received investment to either two years or until the next revaluation period, whichever is longer. This would remove the disincentive to investment from business rate increases as soon as the project is completed.
With the Budget just a week away on October 29th, the BBPA is calling on the Chancellor Phillip Hammond to support pubs by reducing their business rates burden. Doing so would be one way the Government can help back the beer and pub industry and support one of the nation’s greatest institutions, the pub.
Brigid Simmonds, Chief Executive of British Beer & Pub Association, said:
“The number of pubs in the UK is still falling; three close their doors for good each day. They are facing increasing and considerable tax pressures from a range of sources; particularly high beer duty, unfair business rates and VAT. This is deeply concerning because pubs are a great British institution and are often the social hub of their community.
“Pubs pay more than £500 million in business rates and 2.8% of the total bill, although they only equate to 0.5% of turnover. This important study highlights why we are calling on the Chancellor to extend the £1,000 rate relief for pubs beyond this year. This will save thousands of jobs and ensure that pubs across the UK can remain open, including community pubs and those in rural areas who would suffer most should their rate relief be axed. The report also confirms why delaying revaluation following a new Investment would also be a major boost.”