Pub owners in Liverpool have welcomed Prime Minister Andy Burnham's move to cut business rates but warned that much more is needed to save and protect these treasured institutions.
The ECHO has spoken to the bosses of some of the city's most popular boozers after the new Prime Minister announced this morning that there will be a 20% cut in business rates for pubs, clubs and live music venues from next April. The news has come as a boost for the struggling sector, with many hospitality venues warning in recent times that they are facing a near-impossible task to stay afloat as they are hit with rising costs and soaring bills.
But pubs owners in Liverpool pointed out that they have already been clobbered with rate rises this April and are facing more hikes next year, suggesting the new measure won't make a huge amount of difference.
Pub owners react cautiously
Fiona Hornsby, along with husband Dominic, own Liverpool pubs The Denbigh Castle, The Bridewell and The Pen Factory and recently acquired the legendary Swan Inn on Wood Street. Reacting to today's news, she told the ECHO: "Immediately you go, oh that's great - and then you remember that business rates went up this year and are supposed to be going up again next year."
She added: "The devil is in the detail isn't it, will they stay where they are now and the 20% comes off that, or do they go up again next year and it comes off that? Everything just keeps coming at us and you just wonder when it is going to stop."
Ms Hornsby said: "I think business rates need a complete overhaul. When we bought the Denbigh Castle its rateable value was £14,000, now it's £42,500. So we have taken a derelict, failing business, turned it around, employed a dozen people - paying a huge amount in VAT and other taxes and then you get to pay more business rates, even though it is still the same size."
She also noted: "The other one lots of people forget is Sky and TNT which is linked to your rates and goes up with them, even though we don't have any more seats. Hopefully something will be coming down the road for restaurants too, maybe a reduction in VAT. We would rather a VAT reduction than business rates really, because it would be more substantial. The rateable value for The Pen Factory is really high. So it's a start. He's only been in for three days, so give him a chance."
Everton fan Mr Burnham has been a patron of The Denbigh Castle in the past - a popular pub with Blues supporters - and Ms Hornsby added: "He used to come in here for a drink and he's a nice guy, we can only wish him well. He's done three positive things, they might be small, but it is something. I do believe him that he is going to try, we just hope he will be successful."
Small businesses need immediate help
Gareth Morgan, the owner of the Dead Crafty Beer Club pubs in Dale Street and Allerton Road, was similarly cautious in his optimism for the impact today's new policy will have. He said: "It is a positive move and some people in our industry will be happy with it, but in reality for most small businesses like ourselves, business rates went up 43% in April, so this will only be a 20% saving on that and it isn't coming until next April."
He added: "That's not really helping small businesses enough who need it right now. With the many costs we are facing, we need it today not in April. Hospitality, which brings in so much money - especially to a massive hospitality city like Liverpool - is just being penalised at the moment."
Mr Morgan continued: "The reality is that we are employing more people and generating more money for the government - we are just a small tax collector for the government. Paying 20% VAT, business rates going up for both venues, it's a lot and we don't see any benefit for that going up, it's just a tax on small business. Both our businesses went into the next bracket and we don't now get small business rates relief. So our derelict building that we took over 11 years ago in Dale Street, which along with other independent businesses has transformed that entrance to the city - and all we get told is it will cost us more to run. Why is that? What is the benefit to my business of that?"
Connor Devlin, who runs The Vernon Arms in Liverpool city centre told the ECHO: "Any cut to business rates is very welcome and 20% does amount to a reasonable reduction, primarily because business rates are so high. But you have to remember that the business rates exemption for hospitality ended this year. All rateable values were also reviewed and increased this year and that impacts on many other costs that are based on rateable value."
He added: "We need relief now - the rates cut is not until next year. They need to urgently reduce the VAT rate on hospitality. If you think of a £30 round of drinks, we pass £5 of that to the government for VAT, and after all the other costs, there isn't £5 left for the business. In a lot of cases, there is nothing left."
