Greene King landlords plea for Rachel Reeves to cut bills
More than 600 Greene King landlords have called on Chancellor Rachel Reeves to lower taxes for pubs ahead of the Autumn Budget as the sector grapples with ever-rising costs.
The hospitality industry has been vocal about the cost pressures it has been facing since the Covid-19 pandemic began in 2020, with businesses facing surging energy, food and wage costs.
In a letter to the Chancellor signed by 613 pubs landlords, Greene King asked Reeves to “recognise the unique economic and social value pubs bring to communities across the UK” by applying a 20p discount to the business rates multiplier for all pubs.
While the government has pledged to reform business rates, venues across the country face a steep rise in bills next April after a revaluation of property values.
Business rates are currently calculated based on turnover, with “limited regard for the high fixed costs and low margins typical of our sector”, the letter said.
“A shift to using profitability as the basis for valuation would provide a more accurate picture of a pub’s economic position, delivering a fairer system that better reflects the realities of running a pub and helps ease the burden on the sector,” it added.
Pubs ‘under serious pressure’
Eight pubs a week shut their doors for good across the UK over the first half of the year amid rising tax and labour costs, according to new figures.
Around two thirds of British hospitality businesses have less than six months of reserves left while one in five have nothing to fall back on.
The hospitality industry’s reliance on large numbers of part-time workers left it particularly exposed to an above-inflation increase to minimum wage and a £24bn employer national insurance contribution hike last October.
“Payroll costs are piling up, and businesses can’t just keep raising prices to cope,” Laura Madeley, head of hospitality and leisure at Menzies, said.
“With the Autumn Budget looming, the sector urgently needs real relief on VAT, NIC and business rates to protect jobs and keep UK hospitality alive,” she added.
Greene King’s letter continued: “With many pubs under serious pressure, we urge you [Reeves] to use the Budget to provide immediate relief on business rates – giving us the breathing space to invest in our people and our premises.
“We are ready to deliver the growth and jobs your Government wants to see. Now we need you to reduce the regulatory burden holding us back and ensure pubs can thrive.”
Greene King calls for ‘urgent help’ after losing £150m
The letter comes after City PM reported in May that Greene King had issued an urgent plea to the government for help after slumping to a near-£150m loss in 2024.
The Suffolk-headquartered group fell to a pre-tax loss of £147.1m during its latest financial year, having posted a profit of £45.2m in 2023.
Greene King, which operates around 2,600 pubs, restaurants and hotels across England, Wales and Scotland, however saw its revenue increase from £2.37bn to £2.45bn over the same period.
The results came after the cost-of-living crisis and no major international football tournament being staged in 2023 led to profit being slashed in half at Greene King during its prior financial year.
Greene King chief executive Nick Mackenzie revealed its results had been impacted “by the outlook for the industry, which was compounded by decisions made in the government’s Budget which have dramatically increased our costs”.
He added that the government should “urgently introduce” business rates reform, reduce regulation and the cost of doing business to “ensure that our critical sector is protected and pubs remain at the heart of communities UK wide”.
In its results, Greene King revealed that the government’s Autumn Budget in 2024 contributed to it posting non-cash goodwill and property accounting impairments of £208.5m for the year.
A government spokesperson said: “Pubs, cafes and restaurants are vital to local communities, that’s why we’re cutting the cost of licensing, helping more pubs, cafes and restaurants offer pavement drinks and al fresco dining, and extending business rates relief for these businesses – on top of cutting alcohol duty on draught pints and capping corporation tax.”