Monday, 24 March 2014

Are Things Looking Up?

As part of my "job" as local CAMRA Chairman, I like to keep in touch with my local publicans.  It makes us relevant and talking their language, listening and seeking their views is never a bad thing. So when I deliver our local CAMRA magazine it gives me the opportunity to have a chat to licensees. Most are keen to bend my ear about the shortcomings of their pub companies or breweries, or to impart gossip and sometimes, good news.  I've spoken to five in the last few days and you know what?  All of them, in brewery tied houses, are feeling very upbeat indeed and the pubs are trading well.  One recurring theme though is the issue of business rates.  This was forcibly and plainly stated by one landlord, whose business rates cost him more than his rent.  He was also at pains to point out  "And I get fuck all for it", complaining that he has still has to pay a private company to get his bins emptied.

I looked this up and indeed this is true, as indicated by this rathern unconvincing explanation from HMG; "Your rates are not a payment for specific services but are a contribution from businesses towards all of the services provided by the Council for the community, such as local transport, education and housing, all of which indirectly benefit businesses in the area."  I'm not sure businesses would take that view. It does seem a tad unfair that a local tax provides no direct benefit to those on whom it is imposed and small wonder it is a source of indignation to say the least.  Nor that businesses are campaigning to have the system reformed.  So much is talked about pub rents, but in these cases at least, the local council are seen to be putting the knife in.

Putting that aside though, it was pleasing indeed that these publicans were optimistic and upbeat and while this area has had a major shake out of pubs in recent years, maybe those good enough to survive are doing better than I had previously thought.  It was also pleasing to observe for myself, that in the pubs I visited, three were going like a fair and two, despite it being quiet times had a pleasant sprinklng of customers. In all cases the beer was good too.

Could it be that as things stabilise in some well run pub companies and breweries, that the focus shifts to unfair local taxes?

I was also pleased to find warm feelings towards CAMRA too. Maybe not typical everywhere, but if you put the work in, it gets rewards.


Jake said...

Swings and roundabouts. If local businesses assume some of the financial burden for services, then householders are relieved of an equivalent amount. It puts more money in their pockets, which they can choose to spend with local business... including down the local pub, if they like.

Cooking Lager said...

Rates are set by central government, not local

I think one legitimate moan, many businesses have is the 2 year delay in revaluation, during an economic downturn.

You would expect in a downturn that commercial property is revalued downwards. Delaying a revaluation is a stealth tax on the hardest hit businesses.

Commercial property has fallen in value in the north and risen in the south, meaning the delay in revaluation has benefited the south at the expense of the north.

It is one reason the tory party is seen as a party of the south that does little for the north, and something Gideon ought to think on if he wants to rebuild his party in areas it is in long term decline.

The system does benefit the lefties, however, as since business rates were set centrally there has been a long term decline in the number of local business owners that see a point in local political activity. 50 years ago these people were often the local stallwarts of the Tory associations with a reason to support candidates that would keep business rates down.

As for why businesses should pay business rates, it is the punter that ultimately pays but why shouldn't the drinkers make a contribution to the cost of the council sweepers clearing up the mess of another Friday night town center piss up?

Tandleman said...

Cookie . Invaluable as always.

arn said...

I may be wrong here but isn't it the sociologist view that improved housing education etc will encourage a higher social class to an area which statistically have larger disposable income to spend on these businesses.

Tandleman said...

Maybe arn, but you know what they say about sociology? The study of those that don't need studying by those that do!

BeerHawk said...

I'd take issue with the idea we get fuck all for our rates, as businesses we benefit from the education currently being provided to future employees, my delivery trucks get to use the roads, the council provide business advice and a legal framework to operate a business in etc. etc.
So while there no direct you-pay-this-and-get-this setup we do get something and anyway if local businesses were to pay nothing for those services it'd just shift the burden onto residents, and i'm one of them as well!!

py said...

The gvt has to get its £££ from somewhere. Lots of little taxes here and there create less of a distortionary effect than one great big tax.

Cooking Lager said...

lots of little taxes mean we don't notice how heavy the tax burden is, py ;)

But if business rates get any reform beyond revaluation it will be due to to the disadvantage bricks and mortar retailers have against on line retailers. It's started to become noticeable that many high street stores are not currently viable.

Whilst it's sad there is no longer local pressure in the political process to keep rates down, one reason to set them centrally is to prevent local councils killing the golden goose of the local economy.

There had been a hollowing out effect when you have a left dominated city center and more right dominated satellite towns offering different tax levels.

I can't think what you'd replace it with. A turnover tax is a sales tax in all but name, like VAT. Expect a fudge.

Jonny said...

It's worth adding that licensed premises are valued on their turnover not the fair rental value as with all other businesses. It equates to around 10%of gross turnover at the moment, depending on sales mix a various other odds and ends. So the better you're performing at your valuation the higher your rates bill will be.