Business leaders have welcomed the government’s decision to cut business rates by 20% for pubs, clubs and live music venues, but many say the measure should mark the beginning, rather than the end, of wider support for UK businesses.
The announcement forms part of Prime Minister Andy Burnham’s early cost-of-living package and is intended to ease financial pressures on parts of the hospitality sector. While businesses agree the reduction will provide much-needed relief, there is growing consensus that many other sectors facing similar challenges should not be overlooked.
Craig Morgan, Insurance Expert at SJL Insurance Services, believes the announcement sends a positive signal to businesses but says firms will be looking beyond individual policy announcements when assessing the government’s economic agenda.
“The decision to reduce business rates for pubs, clubs and live music venues is an encouraging early signal that the government is looking at practical ways to support businesses while also addressing wider cost-of-living challenges.
“For many business owners, the key question is whether this marks the start of a broader strategy to help firms manage costs, invest with confidence and plan for the future.”
Morgan argues that confidence is built through consistent policy, giving businesses the certainty they need to invest, recruit and grow over the longer term. He also believes helping firms manage operating costs, including business rates and energy bills, remains essential to supporting sustainable growth.
Others have questioned why the relief has been limited to selected parts of the hospitality sector.
Julia Lo Bue-Said OBE, Chief Executive of Advantage Travel Partnership, says the announcement recognises the pressures facing many businesses but warns that other sectors within the visitor economy continue to face many of the same financial challenges.
“The decision by Andy Burnham to back a 20% cut in business rates for pubs, bars and live music venues is a welcome recognition of the pressures facing businesses that are central to the UK’s economy.
But where is the support for hotels, restaurants and the thousands of small and medium-sized enterprises (SMEs) that underpin so much of the UK’s economy and workforce?”
She argues that travel businesses, hotels, restaurants, attractions and transport providers form an interconnected ecosystem, meaning support for only one part of the sector risks limiting the wider economic benefit.
Julie Fisher, UK CEO at Simply Business, also welcomed the government’s swift action, describing it as an encouraging sign for small businesses.
“The announcement of a 20% cut to business rates pubs, clubs and live music venues is a clear sign that the government is listening. Seeing Prime Minister Andy Burnham willing to move quickly to relieve cost pressures on small businesses is certainly encouraging. The question that remains is whether this goes far enough, and how quickly independent operators will feel the benefit.”
She noted that energy costs continue to weigh heavily on hospitality businesses and said further measures benefiting SMEs across the wider economy would help strengthen long-term business confidence.
The employment impact was highlighted by Kevin Fitzgerald, UK Managing Director at Employment Hero. He says the hospitality sector has already experienced slowing employment growth as businesses contend with rising wage costs, National Insurance increases and additional regulation.
“A 20% reduction in business rates will provide welcome relief for the hospitality sector, which has borne the brunt of spiralling employment costs and a rising regulatory burden over the past 18 months.”
Fitzgerald believes hospitality will continue to play a key role in tackling youth unemployment but says restoring business confidence will require broader action to reduce complexity and encourage job creation.
Restaurant technology company Flipdish believes independent restaurants should also benefit from additional support.
James McCarthy, Chief Revenue Officer and Co-Founder of Flipdish, says many operators continue to face rising costs across wages, food, rent and energy while consumers remain cautious with spending.
“This is largely positive for hospitality and will undoubtedly provide some breathing space for pubs, clubs and music venues when a number of these businesses are facing closure, but this measure does not currently go far enough.”
He argues that extending support across the hospitality industry would help independent businesses invest, protect jobs and continue supporting local communities.
Outside hospitality, Calum Russell, CEO and Co-Founder of flexible workspace operator Covalt, says business rates remain a significant issue for serviced office providers, warning that recent changes affecting the sector risk holding back SME growth.
“If Andy Burnham is serious about being a pro-business Prime Minister, then few sectors are better placed to support this economic growth mission than Flexible Workspace providers.”
Russell believes reforming business rates for flexible workspaces should become a government priority to ensure SMEs continue to have access to affordable office space and the support services they need to expand.
While businesses have broadly welcomed the government’s first move on business rates, the message from across the SME community is remarkably consistent. The reduction is seen as a positive start, but many believe it should form part of a wider package that provides greater certainty, eases cost pressures across more sectors and creates the confidence businesses need to invest, recruit and grow.