Wetherspoons boss blasts Rachel Reeves' ‘ridiculous' tax raid, warning more pubs will shut
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THE boss of Wetherspoons has blasted a planned Government tax raid, warning it could lead to fewer pubs on the high street.
Chairman of the major pub chain Tim Martin said a proposed shake-up of business rates by Rachel Reeves could lead to closures.
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Tim Martin has cautioned over a planned hike to business rates
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The Telegraph reported the Chancellor will announce a hike in rates for larger premises, which could include pubs, in her next Budget, to the cost of £1.7billion.
Business rates are a tax paid by businesses on non-domestic properties like shops, restaurants and pubs.
But Sir Martin has warned the hike would pile pressure on pub bosses who are already tackling higher costs than supermarkets who don't have to pay VAT on food sales while pubs do.
Pub bosses were also hit with an increase in employer National Insurance contributions and the national minimum wage in April.
Sir Tim said: "Higher business rates will exacerbate the already ferocious tax disadvantage that pubs are currently labouring under, inevitably resulting in increased home consumption and less pubs."
The warning comes as the boss of Greene King calls for an overhaul of business rates for the sector as pub closures surge across the UK.
Nick Mackenzie, boss of the 1,500-strong pub firm, said reduced property tax payments were needed to drive investment and new jobs after swallowing recent cost hikes.
It comes days after figures from the British Beer and Pub Association (BBPA) pointed towards a surge in pub closures due to heightened financial pressures.
The body estimated that 378 pubs will close this year across England, Wales and Scotland after increased stress on the industry so far this year. It said this would amount to more than 5,600 direct job losses.
Industry bosses have said easing business rates could help support some pub businesses currently at threat of future closure.
Mr Mackenzie said the current system of business rates is 'unfair' on the sector, focusing on revenues rather than profitability, which has heavily diminished across pubs in recent years amid sharp increases in operating costs.
'Pubs are going to be around for the long term, but we need to address the unfairness in the system to allow them to flourish,' he said.
'It isn't fair that the sector has 0.4% of the rateable property but pay 2.1% of the bills.
'The sector is a massive employer and incredibly important for local communities, so we just feel it is important to underline how beneficial it is to tax pubs fairly."
The Sun asked the Treasury to comment.
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But Liberal Democrat Baroness Thornhill, a vice president of the Local Government Association, said: 'There could be an alternative version to this – major housebuilders pay £100 million to halt the CMA's investigation into potential illegal collusion through the sharing of competitively sensitive information that could have inflated house prices. 'While this settlement might appear a pragmatic, cost-effective solution, would it not be more useful to have some evidence-led answers about whether the business models of the major developers are a significant factor in the slow delivery of housing? 'Therefore, should not the Government insist that the CMA actually completes its investigation, rather than allowing a financial settlement that obscures the fact and definitely looks dodgy?' Responding, Lady Taylor said: 'The CMA is continuing its work on this, and on July 9 it announced that it is consulting on its intention to accept commitments offered by the housebuilders in relation to the investigation. 'That consultation closes on July 25, and I have already set out some of the commitments that the seven companies have made. 'The £100 million payment, the largest secured through commitments from companies under investigation, will be split between affordable housing programmes across all our four nations. 'I hope that will make a significant contribution to delivering the affordable housing we all want to see.' Tory former housing minister Lord Young of Cookham said: 'If the Competition and Markets Authority confirms this £100 million payment for anti-competitive activity, can the minister give an assurance that none of the affordable homes to be built with that money will be built by the volume housebuilders responsible for this activity? 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A CMA spokesperson said: 'Our year-long study of the housing market found that the complex and unpredictable planning system, together with the limitations of speculative private development, was responsible for the persistent under-delivery of new homes in the UK. 'It was also clear that concerns about sharing of confidential information, while important, were not the main driver of the undersupply of housing. 'The £100 million payment we have secured for affordable housing would provide immediate benefits across the UK, without a lengthy further investigation. 'It is in line with fines levied in similar cases that have taken many years to conclude and comes alongside a set of commitments which fully addresses our competition concerns.' Bellway, which has agreed to pay £13.5 million, said: 'Bellway's offer of commitments does not constitute an admission of any wrongdoing, and the CMA has made no determination as to the existence of any infringement of competition law. 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