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The Budget

Written by Steve Bury

In the run up to the budget CAMRA members wrote to their MP’s asking them to contact Chancellor Phil Hammond about the negative effect that our excessive beer duty and business rates is having on pubs. Hopefully the large amount of letters sent contributed to the Chancellor making two key announcements in the Budget firstly to put another freeze on beer duty and secondly to introduce a new package of business rate relief. Because of the announcement of a new package of rate relief, this means that the pub specific rate relief has been cancelled as planned.

Beer and Cider duty frozen

The Chancellor froze beer duty in the Budget. This is great news for beer drinkers which will mean that pubs should not have to raise their prices. The industry could do with a boost and any price increases at this time would just reduce customers visits to pubs and lead to closures.

Cider duty was also frozen but it was announced that so called “White Ciders” will get a tax increase. When White Cider is mentioned this normally means stronger cider (over 6%) so this could have an effect on the price traditional real ciders and perries.

The freeze only applies for a year and more work needs to be done to promote beer consumption in community pubs rather than people buying cheap alcohol in supermarkets. When the UK leaves the European Union there is now a chance to look at ways we can reform beer duty to provide relief to the regulated on trade, for example by giving a preferential rate of duty to draught beer.

The first signs of this are being seen with the Chancellor raising duty on wine over 90% of which is imported. Wine importers are not best pleased and have pointed out that UK produced wine a growing market should be exempt from the increases.

New package of business rate relief announced, but pub specific rate relief is ended

The Chancellor announced a new package of business rate relief which gives all retailers with a rateable value of below £51,000 a third off their business rates bill for the next two years. This is good news for pubs that fall into this category.

Although many pubs will benefit from the new rate relief package, the £1,000 pub specific rate relief for pubs with a rateable value of under £100,000 has ended. This means that pubs with a rateable value of between £51,000 and £100,000 have lost a small but vital relief to the large tax bill they face.

Many of the pubs that this relief has been removed from are pubs that saw large increases in their rates bill following the last revaluation, and therefore will be struggling most to stay viable as a business. Furthermore, while the relief will be brilliant news and a vital lifeline for lots of small pubs, it is a temporary solution that doesn’t fix the root issue of the unfair amount that pubs pay of the total business rates bill. If we want to save pubs, we need a full review of business rates to look at changing the system.

The Budget did nothing to help the 24 pubs in St Albans with a rateable value above £51,000, including several which are valued over £100,000.

In an open letter to the city’s MP, Anne Main, the Save St Albans Pubs group wrote: “The ‘sticking plaster’ from the Chancellor to give a third off rates was a positive step in the right direction. However, we need to highlight this will not help the 50 per cent of St Albans pubs most affected by your party’s business rate reform implemented three years ago. We need the government to act now, not in two years.

Pubs in St Albans generate over £40 million pounds for our local economy, employing hundreds of people, and generate over one hundred thousand pounds a year for charities and community groups.

Mrs Main had agreed to meet the Save St Albans Pubs group, but pulled out just hours before the meeting and after the group of six licensees had already arrived in London to meet her, so the meeting took place with one of her assistants.

Please note that this new business rates package only applies to England at present and will have to be accepted by the devolved parliaments in Wales and Scotland.

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