The boss of pub giant Greene King has said the Government needs to overhaul business rates for the sector amid rising closures across the UK. Nick Mackenzie, boss of the 1,500-strong pub firm, said reduced property tax payments were needed to drive investment and new jobs after swallowing recent cost hikes.
It comes days after figures from the British Beer and Pub Association (BBPA) pointed towards a surge in pub closures due to heightened financial pressures. The body estimated that 378 pubs will close this year across England, Wales and Scotland after increased stress on the industry so far this year, resulting in more than 5,600 direct job losses.
Business rates system "unfair"
Mackenzie said the current system of business rates is "unfair" on the sector, focusing on revenues rather than profitability, which has heavily diminished across pubs in recent years amid sharp increases in operating costs. "Pubs are going to be around for the long term, but we need to address the unfairness in the system to allow them to flourish," he said.
"It isn't fair that the sector has 0.4% of the rateable property but pay 2.1% of the bills," he added. "The sector is a massive employer and incredibly important for local communities, so we just feel it is important to underline how beneficial it is to tax pubs fairly."
Investment plans scaled back
Greene King is among pub firms to have said recent cost increases, such as the rise in National Insurance contributions and the higher national minimum wage, have caused them to pull back on some investment plans. Mackenzie said Greene King would secure £13.7 million in annual savings to be invested in its pubs with reforms to business rates.
The firm is asking Chancellor Rachel Reeves to introduce a specific, lower business rates multiplier for all pubs at the Autumn Budget, giving them a 20p discount on their current rate. It is also asking the Government to change how the Valuation Office Agency calculates the rateable value of a pub at the 2026 revaluation.
Government reform promises
The Labour Government has previously said it plans to reform business rates to "create a fairer system". The demands came as the company released its Growth on Tap report on reforming tax policy in the sector, which highlighted that its pubs are facing significant business rate increases due to a recent reduction in discounts for the sector.
"The Government has made growth its number one priority, and the Chancellor now has the opportunity to make changes that will immediately unlock millions of pounds to do just this," Mackenzie said. "We will be able to go even further and faster with our investments - creating new jobs, refurbishing pubs and breathing life back into communities up and down the country."
(PA) Note: This article has been edited with the help of Artificial Intelligence.
