The number of pubs in England and Wales that closed their doors for good rose sharply in the first half of 2023, prompting warnings to the government that planned increases in business rates could force further closures in the struggling sector.
Figures show that 383 pubs, or more than two a day, “disappeared” in the first six months of this year, almost matching the total for the whole of 2022, when 386 were lost.
The data, from commercial property analysts Altus Group, measures the number of pubs that have closed permanently, either because they have been demolished or converted for use as homes or offices.
The chief executive of one of the UK’s leading pub groups has joined Altus in warning the chancellor, Jeremy Hunt, that more closures could follow if he goes ahead with plans to scrap the business rates discount.
Chris Jowsey, chief executive of the 1,000-strong Admiral Taverns chain, said the relief was vital for many pubs.
“Without it, many pubs will see their costs rise dramatically by many thousands of pounds, fuelling inflation and forcing many independents to close,” he said.
“Having survived Covid-19 and the cost of living crisis, it would be tragic if the government now chose to increase rates bills and cause pub closures.”
Pubs, along with other hospitality, leisure and retail businesses, currently benefit from a 75% discount on their business rates bills, capped at £110,000.
Hunt announced the £2.1bn relief scheme in his Autumn Statement in November 2022, but the discount is due to end in March 2024.
The impact of the phasing out of the relief will be exacerbated by a planned rise in headline business rates in line with inflation, which is due to come into effect next April. This could add 6% to bills, Altus Group said, calling on Hunt to extend the rate relief beyond March next year.
“With energy costs up 80% year on year, in a low growth, high inflation, high interest rate environment, the last thing pubs need is an average business rates increase of £12,385 next year,” said Alex Probyn, head of property rates at Altus Group.
The pub industry, one of the hardest hit by the restrictions on socialising imposed during the pandemic, has struggled to recover in the face of sky-high energy bills, soaring raw material costs and difficulties in recruiting staff.
Britain’s biggest pub group, Stonegate – which owns chains such as the Slug & Lettuce and Yates’s – has told customers it will charge them an extra 20p for a pint at busy times such as weekends.
The Federation of Small Businesses (FSB) is also calling on the government to extend the 75% rate relief for retail, hospitality and leisure businesses beyond next spring’s deadline, and to raise the threshold for small business rate relief from £12,000 to at least £25,000. This would take more than 250,000 small businesses out of the rates system, they say.
“For many small businesses on the high street and in town centres, the current relief is a lifeline,” said FSB national chairman Martin McTague.
“This is due to end in April, creating a cliff edge that will be hugely damaging for thousands of businesses. Ensuring that the relief is maintained for those businesses that need it most will be key to their survival.”
