Admiral pubs boss: business rates will ‘kill off the high street’
The boss of a northern-based pubs company has claimed business rates will “kill off” the high street as well as pubs unless the levy is fundamentally reformed.
Chris Jowsey, chief executive of Admiral Taverns, told CityAM the government must deliver on its pledge to overhaul the business rates system, which he said “penalises bricks and mortar” firms in favour of online retailers.
Chester-headquartered Admiral owns 1,365 community pubs in the UK and posted increased profit on Monday, defying the wider gloom facing the hospitality sector.
Chancellor Rachel Reeves was forced to announce emergency business rates support last month after budget changes to the levy caused the sector to warn it was on the verge of collapse.
‘Labour must keep pledge to reform business rates’
Jowsey said spiralling costs mean a wholesale rethink of business rates is the only way out for Britain’s pub sector.
He said: “Every party over the last 20 years has promised to reform business rates, and none of them have done it.
“This government has said they are going to do it over the next couple of years, but they need to deliver on that promise. If they continue to tax business rates in the way that they do then they won’t just kill off pubs, they’ll kill off the high street as well.”
Jowsey said the current business rate system, which is tied to property value, means online retailers pay little compared to pubs despite “generating very large profits”.
“If you do that you’re just penalising bricks and mortar, and those kind of businesses on the high street will suffer accordingly,” he said.
‘Cost is growing faster than revenue’
The rising tax and employment costs facing pubs are masking a resurgent appetite for hospitality and nightlife, Jowsey believes.
“The cost base is growing faster than revenue, so it’s squeezing the ability to make a profit out of the trade. That’s the fundamental challenge,” he said.
Admiral Taverns tries to keep its costs low by offering little or no food and investing in its sustainability measures to cut overheads, Jowsey said.
The group invested £13.5m in its pubs in the last financial year and saw revenue rise by eight per cent to £210.4m, boosting underlying adjusted profit by 13 per cent to £68.9m.
Last week, hotel tycoon Surinder Arora called for Labour’s £300m business rates relief package, which currently only applies to pubs, to be extended across the hospitality sector.
A Treasury spokesperson said: “We’re backing the high street with a £4.3bn Budget package to cap big bill hikes – stopping bills rising for over half of business properties.
“Our Plan for Small Business will help SMEs access the tools and support they need to unleash their potential, and later this year we’ll publish a new High Streets Strategy that will build on the £5bn Pride in Place programme to renew our neighbourhoods and high streets.”