Tan Dhesi MP for Slough
Pubs are a vital part of our high streets and social fabric in communities throughout the country. They also play an important role in our national economy. Indeed, before the pandemic, the sector was supporting 900,000 jobs, generating £23 billion in economic value and providing £13 billion in tax revenues. I am aware though that pubs face a range of tax pressures, including beer duty, business rates and VAT. Even before the pandemic, pubs were under severe threat, with a 15% fall in their number from 2010 to 2020.
The Chancellor recently scrapped the planned duty increase for beer and wine and noted that he was not going to let alcohol duty rates rise in line with RPI. However, businesses face many financial pressures in this difficult economic time, particularly with the ongoing energy crisis.
On business rates, I believe we should have frozen rates this year to increase the threshold for small business relief, giving small and medium-sized businesses in all sectors a discount. This Tory Government created a cliff edge for businesses with rising tax commitments as well as withdrawing support such as furlough before our economic recovery had even begun. As a result, I have spoken in Parliament highlighting these facts and more, putting the case forward for UK businesses (see here and here).
I am concerned that the Government is not listening to hospitality and other businesses about the support they need. I believe it needs to assess what impact ending the reduced rate of VAT will have on jobs and businesses in the sector. On business rates, meanwhile, I believe it has missed the opportunity for fundamental reform. In the final report of its business rates review, the Government said it was “not proposing changing the nature of the tax, or the basis of valuation”. I believe, though, that we need to scrap the current system and replace it with one that is fairer and provides a level playing field for the high street businesses that do so much to enrich our lives. Given the number of jobs depending on our pubs, an overhaul of business rates is long overdue and must be part of a real plan to help our hospitality industry thrive.