UK business rates need change to provide more fairness
UK business rates need change to provide more fairness
17 SEPTEMBER 2018 7:35 AM

The United Kingdom’s entire hospitality industry is suffering, and changing business rates is the first line of attack in order to reverse worrying trends.

Speaking at the launch of the United Kingdom Workforce Commission 2030 report on attracting and retaining staff in the hotel and hospitality industry in grand Committee Room 10 in the Palace of Westminster, Kate Nicholls, CEO of industry lobby association UKHospitality, took the opportunity to sound some of her additional concerns.

One concerned business rates, taxes paid on any property used as a business address. There very much needs to be a review on this. Hotels and other hospitality businesses can no longer be treated as cash cows, while digital businesses perhaps can hide in offshore havens and get away with paying little or nothing merely because they claim they are providing employment.

The report was co-authored by Members of Parliament sitting on several all-party Parliamentary groups, and several of them were in the room. The perfect place for another plea on the issue.

UKHospitality’s argument concerning business rates is that they are not realistic in this era of online shopping and mass High Street store closures.

Nicholls spoke of hotel and hospitality businesses having what she claimed was “one-third wiped off their margins” since the last re-evaluation of business rates in April 2013.

Nicholls has not been shy in saying that digital businesses have not paid their share of taxes, while High Street businesses have nowhere to hide and therefore are through convenience bearing the brunt.

A proposal by the Liberal Democrat party calls for the abolition of business rates and their replacement by something called a “commercial landowner levy,” where taxes are paid on land, not property, but the Lib Dems are in full remodeling phase following several years in the political wilderness.

Other alternatives, or a better organization of the current legislation, must be debated.

According to some, 6,000 jobs have been lost in the hospitality industry, not just in the hotel industry, over the last year or so, and there has been criticism of the hotel industry for not doing enough themselves to attract staff.

At this year’s UKHospitality annual conference, keynote speaker Michael Ellis, parliamentary under-secretary of state at the U.K. government’s Department for Digital, Culture, Media & Sport, strongly hinted at this.

“I would also argue that workforce investment could be one of the most powerful ways to drive perception changes in terms of hospitality and tourism as a lifelong career. I suspect there’s no better recruitment evangelist than a passionate and energized hospitality workforce,” Ellis said back in July.

Pubs—those beating hearts of British culture—are closing down in alarming numbers, and rates likely are an issue there, too, although some might argue public tastes are changing, and the public would rather have a glass of wine at home.

High Street staple Debenhams department store is in very serious trouble at the moment, with the Financial Times reporting that “retailers say that without urgent reform, the higher rates could kill the High Street” and quoted Steve Rowe, the CEO of another department store, Marks & Spencer, as saying “challenges will continue until the system is reformed to create a level playing field between high street and online retailers.”

Hotels will suffer if the restaurants and shops around them disappear.

I’ve said it before, and I will say it again (I like saying that), that it would help tremendously if tourism is given the respect it deserves.

That does not mean changing the minister in charge every year or so. The secretary of state for the department that oversees hotels and tourism (Ellis’ boss), is MP Jeremy Wright, who in July replaced Matt Hancock, who himself only started in January.

Since I started at HNN looking after Europe, there have been four other holders of that office before Hancock.

Critics say not enough is being done to make potential staff see the hotel industry as a career.

I am not surprised when neither is the office of secretary of state at the Department for Digital, Culture, Media & Sport.

Email Terence Baker or find him on Twitter.

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