Budget could destroy seventh-generation pub giant, warns boss
The changes announced in the Budget represent an ‘existential threat’ to the future of a seventh-generation pub and brewing giant, its owner has warned.
William Lees-Jones, who owns and runs Manchester-based JW Lees, which has produced real ale since 1828, has warned he is now “facing the very real prospect that we will never be able to hand on the running of my business to our children”.
The managing director, in a post on LinkedIn, also said in the event of his death, his family will “simply not have the cash or liquid assets available to cover an enormous inheritance tax bill”.
Lees-Jones said that, as a result, they would need to sell parts, or all of the business, “potentially to an overseas buyer who does not have any interest in our people, our community, local jobs, or growth”.
He argued that JW Lees would “very quickly be closed down” if sold to a large international brewer or pub company and “all of those jobs and the very existence of the brewery would be at threat”.
JW Lees is a seventh-generation family business which employs over 1,525 people. It operates 48 managed pubs, inns and hotels and also lets a further 100 pubs.
For its latest financial year, the 12 months to 31 March, 2024, JW Lees posted a revenue of £96.8m, up nine per cent, while its pre-tax profit jumped by 104 per cent to £7.1m.
‘It’s not to late to make some changes’
On LinkedIn, Lees-Jones posted the phrase: ‘We do not inherit the business from our parents but borrow it from our children’.
He said that this is “the driver behind all great family businesses and something that has not been understood by the Government in its Budget”.
The pub boss added: “A lot is now being written in the media about the changes to Agricultural Property Relief and Business Property Relief and what they will do to UK farming and private business.
“The reality is that people are becoming entrenched to pre-existing positions rather than consulting and making this policy work, even if the policy is only forecast to bring in an anticipated £500m per annum or 1.21 per cent of the total £41.170bn impact of the recent budget.
“It’s not too late to make some changes and listening sounds better than U-turning and there’s never been any downside to being a good listener.”
Budget changes ‘represent a very real threat to the very existence of JW Lees’
Lees-Jones added: We’re not happy but will reluctantly ‘suck it up’ and pay the increased National Living Wage and increased Employers National Insurance Contributions in order to pay for our vital public services, but the changes in Business Property Relief [BPR] represent a very real threat to the very existence of family businesses like JW Lees and this is worth fighting for.
“So I have written to our MPs saying for almost 50 years since it was introduced by Jim Callaghan in 1976 BPR has given us the confidence and certainty to invest our savings in the business, employ people, and reinvest our profits back into the business and our community.
“BPR has allowed our business to grow and to stay within the family and this has in turn allowed us to confidently plans for the future and know we can pass on the ownership of our business to the next generation without them facing punitive taxes, which no other model of business ownership is subject to; in fact my son Louis joined the business last May to continue the family legacy and take it into the seventh generation of our founder John Lees who started the business in 1828. BPR has allowed us to compete and grow our business on a level playing field with our non-family-owned competitors.
The changes announced in the Budget end all that and we are now facing the very real prospect that we will never be able to hand on the running of my business to our children.
“In the event of my death, members of my family will simply not have the cash or liquid assets available to cover an enormous inheritance tax bill and that means that they will need to sell parts, or all of the business, potentially to an overseas buyer who does not have any interest in our people, our community, local jobs, or growth.
“JW Lees would very quickly be closed down if sold to a large international brewer or pub company and all of those jobs and the very existence of the brewery would be at threat.”