INSIDER VIEW: Sauce for the hospitality goose is not sauce for the retail gander

The government’s decision to grant targeted business rates relief to pubs, clubs, and live music venues has been welcomed by businesses operating in those sectors, but what could it mean for other businesses?

New Prime Minister Andy Burnham’s decision to cut business rates by 20% from April of next year has been met with a frosty reception from those companies that operate in the hospitality sector, but don’t quite fit in to those three specific segments — cafés, hotels, and restaurants.

But should high street retailers feel similarly frustrated and discriminated against? And how likely is it that the government could extend the relief to trade store fronts in the near future?

The short answer to this second question is: “Not very likely.”

Retailers benefit from permanent lower business rate multipliers introduced for properties with rateable values under £500,000, which is partly why they have not received the additional percentage discounts granted to hospitality.

However, the tide may be turning. Trade bodies, including the British Retail Consortium, are leveraging the hospitality special treatment to press the government for broader high street intervention ahead of the next Budget. 

The argument in favour of pubs in particular — namely that they represent a community hub, whose value goes above and beyond the sweet taste of an alcoholic beverage — shouldn’t be disregarded for high street shops. 

Towns and cities the length and breadth of the UK have seen their centres transform unrecognisably over the past two decades. Where once stood department stores, niche boutiques, and independent cafes, too often now stand boarded-up shop fronts, vape shops, and a Pret A Manger. 

In other words, in economics terms there are positive externalities associated with maintaining a vibrant high street, which may not be as obvious as the community benefits of the local pub.

But this decision by Burnham can do the wider argument no harm. It gives watch retailers and shops of all descriptions the opportunity to say: “Why them and not us?” to the government, which will only increase the pressure on the new Chancellor John Healey.

Further structural adjustments to Small Business Rates Relief remain on the table, offering jewellers a ray of hope for meaningful tax reform.