Pub jobs at risk after hike in business rate

Phil Simpson and Cat Smith outside The Sun Hotel in Lancaster.
Phil Simpson and Cat Smith outside The Sun Hotel in Lancaster.

The owners of a Lancaster pub say they may be forced to make redundancies after seeing business rates almost double overnight.

The Sun Hotel in Church Street will see its annual rate increase from £30,600 to £54,900 on April 1 following a draft revaluation.

Phil Simpson, director of The Sun Hotel and Lancaster Brewery, said: “Naturally this will have a significant adverse effect on our business.

“We have financial budgets and covenants with our bank that we must adhere to and this large extra tax will have to result in some significant cost cutting and the potential for redundancies.”

The company also own The Duke in Barrow-in-Furness which is seeing an increase from £12,285 to £61,200 - up 498 per cent.

Lancaster and Fleetwood MP Cat Smith said the increase was “staggering”, and called on the government to provide immediate emergency relief to stop thousands of businesses going under.

She said: “I know many local businesses are seeing increases in their business rates, but the figures for The Sun Hotel and Lancaster Brewery are staggering. At a time when high streets are struggling to maintain the range of businesses we all want to see – changes like this are hitting our local independent enterprises hard.

“From delaying the revaluation to their failure to put adequate transitional arrangements in place, the Government have mishandled this whole process.”

The government said it would announce new measures in the budget on March 8.

The announcement follows a pledge from Theresa May at prime minister’s questions that small businesses left with the highest rate increases would be helped.

Ms Smith said that the Labour party has a five point plan to help business survive the revaluation, including setting up an emergency transitional relief fund for businesses, excluding new investment in plant and machinery from future business rates valuation, more regular valuations in law to stop businesses facing periodic, unmanageable hikes and fundamental reform of the business rates system to ease the burden on high streets and town centres in the age of online shopping.

She added: “The reality is that business rates are a ticking time bomb. It cannot be right for smaller, town centre retailers like The Sun to be facing massive hikes while the Amazons and ASOS’s of this world have their business rates cut. Given our long-standing productivity problem, it is madness that we tax businesses’ equipment and machinery.”

The Chamber North Lancashire said that rate rises could make some businesses unsustainable.

John O’Neill, chamber manager said: “We are hearing of some non-proportionate increases, but until we see what relief packages are put in place in the upcoming budget, this speculation might be a bit early.

“A vast number firms would be take out of rates system when 100 per cent rate relief is taken up to £12,000, from £6,000”, he added.

Ms Smith is now asking for other local businesses to get in touch with her sharing their experiences.

Mike Cherry, National Chairman at the Federation of Small Businesses, said: “Business rates are an outdated tax. FSB is keen for all political parties to help those small firms hardest hit by the current revaluation, and to start to focus on fundamental longer-term reform of business rates to make sure it’s fair for small firms. It is incredibly important to support small businesses and the self-employed so they don’t face shock tax rises, so we are delighted to take part in the roundtable.”

Andrew Silvester, Head of Campaigns & Deputy Director of Policy at the Institute of Directors said: “It’s hugely important that politicians on all sides look for constructive ways to reform business rates. This is a 20th century system and in a 21st century economy it looks painfully out of date.”