Hotel and pub owners give mixed reaction to business rate cut

THE announcement of the 20 per cent cut in business rates to hospitality businesses has been met with a mixed response.

Andy Burnham, in one of his first announcements since taking over as the Prime Minister said that hospitality businesses will be given a 20 per cent cut in business rates as part of his plan to lower the cost of living.

However, for hotels and pubs in North Cornwall and Holsworthy, the reaction is mixed.

Emma Dow, the landlady of the Garland Ox in Bodmin said: “It would be absolutely amazing. We are struggling in the hospitality sector and there are pubs closing every day.

“We are still feeling the repercussions of the coronavirus pandemic and are getting screwed left right and centre from government and different types of insurances we need.

“National Insurance has also increased and the breweries keep increasing their prices.”

Emma also described some of the other costs related to running a venue which means that a pint in the pub costs more than it does to go to the supermarket.

She continued: “Another of our costs is the licences we need to play music – we have to pay PPL and PRS for background music which is £2,000 a year and then we have to pay £800 to just have a TV on the bar.

“When we took on the Garland Ox there were none of these licences and you have to pay them and that’s before the rent.”

She said that the cost-of-living crisis was also having an impact, adding: “People aren’t coming out as much which means out footfall is less.

“The amount of VAT that pubs must pay is ridiculous, we are paying several thousand every three months to HMRC, and then we have to pay extra tax to have a gambling machine.

“Our insurance went up by £1,500 a year just this year and all of that is before other costs relating to employing people and keeping the lights on and the place warm.”

For Jon Hutchings, the landlord of the White Hart Inn in Holsworthy, the announcement of the 20 per cent business rates cut will have little difference.

He called on the government to instead cut the amount of VAT pubs have to pay, a tax that he says is the highest in Europe.

Mr Hutchings said: To be honest a 20 per cent cut isn’t a huge impact on our business, it depends where you are in the country and the size of your business as to whether it will have an impact.

“Locally, there probably aren’t a lot of people paying any business rates, and for me the biggest help to the sector would be a cut in VAT which at 20 per cent is currently the highest in Europe.

“A VAT cut would be much more welcome on a daily basis rather than a cut in business rates.”

However, one part of the hospitality sector which was left out of the cut to business rates was the hotel sector.

For the owners of the St Moritz Hotel and Cowshed Spa in Polzeath, there was a call not to forget hotels in the brave new world.

Hugh and Steve Ridgeway, the co-founders and owners of the venue said: "Your move to cut business rates for pubs, clubs and live music venues is exactly the kind of bold, sector-literate action both the business owners and the customers have been calling out for. Bravo to you for making a start.

"Here in North Cornwall, we support your mission to ‘drive to build an economy that works for every postcode.’

"We’re very hopeful that your early doors announcement tomorrow will be for the hospitality industry at large. We hope you’ll go further than 20% off business rates and properly ‘slash’ VAT, as excellently lobbied for by the likes of Tom Kerridge and UKHospitality – and our entire industry.

"However, please ensure you do not make an important omission: hotels.

"Hotels aren't the icing on the hospitality cake - they're the load-bearing Victoria Sponge. Whilst others in hospitality lock the door at the end of the night, we power on. We operate 24 hours a day, 365 days a year, employing housekeeping, kitchen, front-of-house, maintenance, management teams and night porters around the clock in a way no café, restaurant or pub does.

"And we support a massive hotel and hospitality supply chain, which in turn supports tens of thousands of jobs in Cornwall alone. And a hotel like ours is quite ‘spread out’, so our business ratable value is judged to be consequently larger.

"We love our ‘locals’. Every guest who stays with us also then spends not just in the pubs, but in the restaurants, the surf schools, the taxis, the coffee shops and the corner shops down the road.

"We're not just hospitality - especially here in our postcode of North Cornwall. We're the engine room of the entire visitor economy - the sustainability-driven staycation industry at that. And on top of that, we're unpaid tax collectors: VAT, business rates, National Insurance for every one of our staff, all collected and handed straight to the Treasury before we've even covered our own costs.

"So – Mr Burnham. Whilst you’re on fire with common sense announcements like this, can we please politely prod on the glaring fact that you need to add hotels to the reduced rates list immediately, whilst applying a ‘deep slash’ to VAT? Not next Budget, now. Anything less is only half a policy – and therefore half a win.

“We understand you’re touring the nation this summer, getting to as many postcodes as you can. You’ll need somewhere to stay when you come to North Cornwall.

“We would like nothing more than to sit down with you over a pint of Doom Bar and talk to you about our postcode, and how we are proud to play our part in the whole vital, local visitor and hospitality industry. And about the vital contribution to large-scale direct and secondary employment and the wider UK economy that we are pleased to make.”