Rates of change that threaten Shropshire's pubs
It is praised in the latest edition of The Good Pub Guide for the range and quality of its drinks. It has previously been crowned the best pub in the county by the Campaign for Real Ale.
But Oliver Parry, who says that in the early days he worked 120 hours a week to make his award-winning Salopian Bar one of the best in the county, fears everything could be lost if the decision of a rates tribunal does not go his way.
“Twelve years of hard work, and one piece of paper through the letterbox could kill us,” he says bleakly.
“There’s no doubt about it, if we do not win our appeal we will go bust.”
Mr Parry is one of thousands of pub landlords across the country who have been hit by a massive rise in business rates as a result of a revaluation process which began earlier this year.
The change has resulted in a four-fold increase in his rates, and unless this is overturned on appeal, it will leave him with no alternative to shut up shop.
It is not just pubs that are affected; earlier this year shopkeepers in Ludlow launched a campaign protesting against the hikes in their rates. But in an environment in which many pubs have been battling for survival for some years, there are some who fear this could be the straw that breaks the camel’s back.
Writing in the latest edition of the authoritative Campaign for Real Ale (Camra) Good Pub Guide, editor Roger Protz warns of a “ticking timebomb” that could sound the death knell for great swathes of the already beleaguered industry.
“The pub is under threat as never before,” says Mr Protz.
“When Camra was formed in the early 1970s, Britain had 80,000 pubs. The number is now fewer than 50,000, and more beer is drank at home than in the pub.”
Mr Protz says the reasons for this are complex and manifold, and says the large pub companies play a role by disposing of perfectly viable pubs to ease their financial problems.
“The pub once stood proud on the high street, the centre of town or village life,” he says.
“Now coffee shops, bakeries, restaurants offering a vast range of food styles, and fast-food outlets compete for the ‘leisure pound’. And multi-channel television and other forms of home entertainment encourage people to stay on the sofa.”
Mr Protz says while there are some signs of hope – the rate of pub closures has actually fallen from 29 a week to 21 – the threat from business rates is very real.
“New business rates announced for pubs in 2017 could have a devastating impact on the sector,” he says.
“Some of the increases, due to be phased in over a five-year period, are truly eye-watering.”
Mr Parry would not disagree. Under revaluation, the rateable value of his pub will increase from £11,000 to £42,500 in just three years.
He had no idea his rates would rise by such a large amount until a friend told him he could check the figure on the internet.
“When I saw it come out at £42,500 I realised that there was no way we would be able to pay it as we do not make a big enough profit,” he says.
“I appreciate that the last business rates rise was in 2007 but since then I have built up business.
“Our rates should be around £25,000, which is still a big sum and a big rise but it is something we would be able to shoulder.”
Mr Oliver appealed immediately, and was quickly offered a settlement – to instead increase the rateable value to £40,500.
“That was disastrous, so I appealed again,” he says.
“But I have heard that they are handling 250,000 appeals, and it’s going to take 18 months.”
A short distance down the M54 from Mr Oliver is John Ellis, who runs the Crown Inn in Oakengates, which also features in the Good Beer Guide, and the Elephant & Castle in Dawley. Like Mr Oliver, he has been hit with swingeing increases in his business rates.
“On the one of my pubs, it was due to go up by £3,000 a year, but after I appealed they reduced it to £1,500,” he says.
“I’m still waiting on the other one.”
He says the length of time that the appeals process takes could take be enough to put some pubs out of business.
“We’re quite robust, but I feel for some of the struggling pubs, I really do,” he says. There doesn’t seem to be any rhyme or reason to it. Some of them are having these massive increases, and others are seeing their rates cut.”
He says one of the great injustices is that while some businesses – such as the large supermarkets – have their businesses valued by their floorspace, pubs are valued by their turnover.
“But every time the chancellor increases the duty on beer, that goes towards the turnover, so we are paying taxes on taxes,” he says.
“The national non-domestic rates system needs a drastic overhaul.”
To soften the blow, the Government has introduced a system of transitional payments, and it points out that beer duties have actually fallen in recent years.
A government spokesman says: “The Great British pub is a national treasure and we’re backing communities that want to protect and run their local.
“We’ve already provided more than 9,000 small pubs with a £1,000 discount on their businesses rates bill as part of our £435 million package of support for businesses. In addition, both pubs and their customers have saved over £2 billion since 2013 thanks to changes to alcohol duty.”