Welsh Budget ‘disastrous’ for on-trade
UKHospitality Cymru has estimated that business rates reform will cost Welsh hospitality £122 million (US$164m) over the next three years.
The Budget was delivered on Monday (20 January) and confirmed that a non-domestic rating list will take place on 1 April, in which no targeted relief will be introduced for hospitality or the on-trade.
Any ratepayer facing an increase of more than £300 (US$403) will receive transitional relief, with increases phased in to reach full liability in the third year. The government has committed £116m (US$156m) over two years to fund the transitional relief scheme.
Revaluation is expected to increase rateable values for many businesses. To mitigate this, the government has cut the standard multiplier to 0.502 – the first reduction since 2010.
A lower retail multiplier has been introduced to support small businesses, but hospitality is not included.
However, the Budget also made mention of possible relief for the on-trade as part of a rumoured U-turn from Westminster.
It reads: “The UK government has indicated it will introduce additional support for pubs in England, following a change in policy from that included in the UK Budget in November. No further details are available about this support to enable us to consider this as part of the final Budget.
“However, once details are available, we will be able to explore whether additional support – beyond the existing permanent relief schemes available to the pub and wider hospitality sector – is needed in Wales.”
UKHospitality Cymru said the exclusion of hospitality from business rates reform will accelerate high street decline, job cuts and business closures.
According to its analysis, the sector’s business rates bill will increase by £29.4m (US$39.5m) next year, by £40.1m (US$53.9m) in 2027/28 and by £52.6m (US$70.7m) in 2028/29.
In total, business rates will increase by 63% over the next three years.
David Chapman, executive director of UKHospitality Cymru, said: “This Budget is disastrous for Welsh hospitality. The scale of these shattering increases will be unsustainable for many businesses and the decision to exclude hospitality from any support will only drive further job losses and business closures.
“Communities and their local hospitality venues will be the ones bearing the brunt of an unjust system that has long been broken, despite promises to reform it for the better.
“The system is in dire need of reform and the Welsh government’s efforts barely touch the side of what is required.
“It is now vital that the Welsh government commits to using, in full, any additional funds flowing from additional support in England to support hospitality businesses.
“All political parties seem to agree that hospitality is unfairly treated by the business rates system, yet still nothing happens. That must change.”
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