The UK hospitality industry is divided over Andy Burnham’s decision to cut business rates for pubs and live music venues, with representatives for the sectors welcoming the news, despite strong criticism from the owners of restaurants, cafes, hotels and amusements and gaming centres left out of the relief. Will the consequences of Number 10’s divisive step to support some businesses and punish others create one important loser: the UK high street?
The BBPA and Night Time Industries Association have welcomed Andy Burnham’s decision to reduce business rates by 20 percent for pubs, clubs and live music venues from April next year, despite claims from other areas of hospitality of “a false and unfair distinction.”
Restaurants, cafes, hotels – and most importantly the amusements, gaming and gambling sector, have been omitted from the relief by the new PM, with casual dining firms such as Leon and Pizza Hut criticising the seemingly arbitrary division, alongside Butlin’s and the Adam Handling Collection.
‘Unfair distinction’
“We all compete in the same market, and we have the same cost structures,” Leon CEO John Vincent told The Telegraph. “When you have the same customers and the same costs, it is the classic definition of being in the same business, so this creates a false and unfair distinction.”
Butlin’s CEO Jon Hendry Pickup said “businesses and resort operators shouldn’t be overlooked simply because of their size,” while Richard Lewis, CEO of RedCat Hospitality, said “targeting relief at only part of the sector risks overlooking the equally important contribution made by accommodation and wider hospitality businesses.”
“It feels like the government is trying to make the support it’s giving hospitality sound better than it actually is,” added Adam Handling, and Pizza Hut UK MD Nicolas Burquier said extending the business rates reduction would “unlock investment in restaurants and teams, protect jobs and help keep eating out, or ordering in, affordable.”
It’s as much about destroying some businesses as it is helping others?
It’s not an overwhelming show of support from all the key hospitality businesses, and that’s not really surprising.
The new PM has set about forcing a clear divide on UK high streets. On the one side, businesses he likes, on the other, a ghettoized business community that he plans to ship out as part of his solution.
And in these Burnham crafted ghettos will be the most regulated businesses in the country – AGCs governed not just by the Gambling Commission but also the local authorities, who already pay out more in tax and Levy contributions than other high street businesses.
The trade body dilemma
The trade bodies currently find themselves in an unenviable position: they have little choice but to play diplomacy – we are, after all, slipping into an authoritarian state, and words must be chosen carefully.
Which probably explains why the rates decision was welcomed by the likes of BBPA CEO Emma McClarkin who said “this sorely needed discount will be celebrated by pubs up and down the country,” while the NTIA’s chief executive Mike Kill said “we look forward to working constructively with government to ensure nightclubs are fully recognised within these measures.”
However, they too fully understand the existential threat that Burnham’s divisive high street policy is delivering. Already aware of the disastrous effect that an increased gaming machines tax could have, the words will likely be less generous as high street business closures unfold.
