Local pubs have backed calls by CAMRA, the national Campaign for Real Ale, to implement tax breaks for UK pubs, a year on from the 2017 revaluation of business rates.
Islington’s pubs have seen their rateable value, a figure based on an estimated value of a property on the open market which determines the amount a business must pay, rise by an average of 42 per cent, the third biggest increase in the country.
Fresh figures on pub closures released by CAMRA this week show that between July and the end of December 2017, 460 pubs closed in the UK, a rate of 17 a week: 52 of these were in London.
“From these new pub closure figures, it is clear that a fundamental change is needed if the British pub is to survive for future generations,” said Colin Valentine, CAMRA’s National Chairman.
A third of the cost of a UK pint is now made up of taxes, according to CAMRA.
“We need to sell 605 pints in a week just to pay our business rates,” said Nick Gibson, landlord at the Drapers’ Arms, Barnsbury Street. “Last week we sold just over 800 pints …. so fully three-quarters of that was just to pay business rates. Never mind rent, staff wages, power….”
The pub’s rateable value increased from £82,000 to £133,000. Independent-run pubs like the Drapers Arms have been particularly hard hit by the revaluation.
“The burden has got to a level which represents an existential risk to many many small pubs, bars and restaurants”.
He accused the Conservative government of “putting a top line tax on our business at a challenging time for so many other Brexit related headwinds”.
“It is simply cowardice that stops them taxing hugely profitable international firms properly for their activities and revenue generation in this country as well as setting proper progressive taxation on wealthy individuals.”
“I agree 100% [with CAMRA] that there’s a perfect storm of factors threatening UK pubs,” said Damien Devine, landlord of the Old Red Lion pub, whose rates increased 58 per cent, to £75,000. “I’ve been here 18 years and this is the most difficult trading environment I’ve gone through.”
Devine said the government’s pub relief scheme, a £1000 a year subsidy to business rates announced in the 2017 Autumn budget, was “a PR process” and was unfair for the situation faced by Islington pubs. “If I were a rural pub in Warwickshire, paying probably £12,000 rates, that’s a big hit. But I’m in EC1. I’m not being ungrateful but a grand doesn’t move the dial.”
“Islington as a borough has trouble processing the fact that pubs like mine are unique. How many other businesses do you know that are family run and they live above the shop?”
Devine said that next year he would no longer be able to afford to pay for Sky and BT sports, the cost of which is tied to a pub’s rateable value.
“There will definitely be more pub closures around Islington and North London,” he added.
Between 2000 and 2016, Islington lost 13 per cent of its pubs, according to CAMRA research published last year. Neighbouring Hackney saw a net gain of 3 per cent, making it the only London borough with an increase.
CAMRA said it sees Brexit as an opportunity for the UK to rethink its approach. “As Britain prepares to leave the European Union, the Government has a unique opportunity to update the tax system to better support pubs, which are a bastion of British culture and at the heart of communities across the country.”
John Cryne of CAMRA’s north London branch told Islington Now: “We think the national government needs to do more [on pub relief] and look at other areas such as high VAT — pubs pay 20% on everything, supermarkets do not — and reducing the high level of duty on beer.”
He added that the council should use planning legislation “to the maximum” to prevent pubs being converted into what developers see as more valuable uses, like flats.