Business rates increase would cost pubs £58m

17-Oct-2013 - Last updated on 18-Oct-2013 at 14:36 GMT

The ALMR says the licensed hospitality business sector can ‘ill afford’ another substantial hike in business rates

Licensed hospitality businesses may be hit with an increase in business rates that could cost the sector up to £58m, after figures released earlier this week revealed that the Retail Price Index (RPI) has risen to 3.2 per cent.

The annual business rate increase for April is currently set by reference to the previous September’s rate of RPI, which was 2.6 per cent – still higher than the target increase of 2 per cent for inflation.

In response to these latest figures by the Office for National Statistics, the Association of Licensed Multiple Retailers (ALMR) is calling for the Government to take immediate action, with the organisation’s strategic affairs advisor Kate Nicholls claiming the sector can ‘ill afford’ another substantial hike in business rates.

“Continuing unpredictable increases in rate bills have put pressure on businesses and this is stifling investment in our property and our people,” said Nicholls. “We already have one of the highest commercial property taxes of any EU country and we urge the Chancellor to use the Autumn Statement to limit next year’s business rate increase to his inflation target of 2 per cent.

“In the longer term, we need a fundamental root and branch review of the system to explore options for reform – more frequent revaluations, a cap or annualised CPI increases to ensure it remains responsive to economic circumstances.

“Take the brakes off and free us up to continue to deliver the jobs and growth the country so desperately needs.”

Hospitality wages outpacing inflation

Meanwhile, separate research released today by the ALMR has proven that, even with the continuing difficult economic circumstances, retailers are managing to ensure that staff are rewarded.

Data from the ALMR’s October 2013 survey of wages found that wage growth in the hospitality sector has outstripped inflation in each of the last three months on record.

After a difficult start to the year when the sector was hampered by a poor weather and economic uncertainty, wages in the sector rose by more than the CPI rate of inflation in June, July and August - underlining the contribution made by the industry to economic recovery and the job-creating potential of the sector.

Moreover, the proportion of staff whose wages increased as a direct result of the October 2013 uprating of the National Minimum Wage declined to pre-recession levels, having peaked at 79 per cent last year.

Nicholls added: “These findings show clearly that when the market allows it, hospitality businesses focus on rewarding their staff. Although we are delivering higher wages and economic growth, the market remains volatile and highly responsive to external pressures.

“Reductions in the cost of regulation would free us to focus on generating jobs, growth and prosperity for our local communities.

“It confirms the finding from our 2013 Benchmarking Report, which showed that payroll now accounts for 25.4% of revenue, an increase on 2012.”