The cavalry is coming, Andy Burnham gleefully told the pub sector in an interview with ITN in front of pub bar, no less (although he did stop short of drinking a pint à la Farage) just to drive home the message. The metaphorical men on horseback in this case is a 20% cut in business rates for pubs, clubs and live music venues across England from April next year, which comes on top of a 15% cut for hospitality businesses announced earlier this year.
Good news then for pubs - although just how good is moot, with one publican noting that the relief equates to roughly the cost of just 150 pints - but what about the restaurant sector? While many restaurateurs have welcomed the news through gritted teeth, not wanting to throw shade on any sort of help directed at a sector so in need of it, the decision has led to a range of emotions - confusion, bewilderment, disappointment and anger.
The feelings of disappointment (and anger) are obvious. The industry has been crying out for support in the face of an increasingly challenging operating environment and to not be included in this new form of relief is an obvious slap in the face. Leon boss John Vincent is among those unable to hide their dismay, accusing Burnham of creating a divide within hospitality with his decision to target pubs but not restaurants.
The confusion, however, comes from exactly which businesses will benefit from the relief and which won’t. As Sam Harrison, co-founder of Genuine Restaurant Group, puts it: “When is a pub a pub, and when is it a restaurant? Half the sites in this industry serve food, drink, and music under one roof — you can’t draw a neat line around them, and government shouldn’t try to.”
It’s a fair question. Yet another one we should be asking is ‘does it matter anyway?’. Although there could be a case for calling it sour grapes, many restaurateurs I’ve spoken with don’t believe the rates cut would have made much difference to their businesses had they been included. As Nick Beardshaw, chef patron at Michelin-starred restaurant Starling, says of the reduction: “It’s an absolute drop in the ocean. Business rates are normally between 2% and 4% of turnover in these businesses, so the reduction represents a 0.4% to 0.8% reduction in total costs. Not enough to save any businesses.”
Many restaurateurs I’ve spoken with don’t believe the rates cut would have made much difference to their businesses had they been included
For many in the sector, the called for cut in VAT is the only lever the Government can pull that will really have any benefit. Chef and restaurateur Adam Handling summed it up recently saying: “VAT is a strain every single month across all of our sites. Hospitality has been asking for meaningful support for a long time now, so the question really is: when are we actually going to see something that makes a genuine difference?”
Only Andy Burnham knows the answer to that question. Yet could the current measures, despite overlooking restaurants, offer a sliver of hope? Burnham is acutely aware of the challenges facing the wider hospitality sector and his decision not to include it in his rates reduction could mean that he has different intentions.
Tom Kerridge, who has been spearheading the VATsTheProblem campaign calling for a reduction in hospitality VAT to 10%, certainly thinks this to be the case. In an interview with BBC Radio 5 Live he said that while the moves by Number 10 didn’t go far enough they did show that there was an understanding by Government that hospitality needs a hand. “I’m hopeful that as the Prime Minister and his team begin to get their feet underneath the table and they get to have an understanding on what’s going on, that there will be more and more measures that come into place to help hospitality,” he says.
Burnham has begun his premiership demonstrating that he is a man of action not just words when it comes to the travails of at least some parts of the hospitality sector. As a self professed defender of the high street as well as the pub, he knows the important roles restaurants also play in the community. “It’s all about doing isn’t it?,” he told ITN. “And I’m doing something today.” Let’s hope he does more tomorrow as well.