Pubs are a core part of my very rural constituency and provide 2,000 jobs overall. In those rural communities, many
pubs are the only community centre. The small shop has gone. The post office has gone, and many of the pubs are now becoming the local store, in addition to being the local pub. We really need them but, despite all that, they are being penalised.
We have discussed a number of taxes, but I will focus on business rates. The challenge for pubs, as I said earlier, is that their business rates are based on turnover. As I understand it, the original intent was to base the tax on the turnover that could be generated given the square footage of the public house. In reality, the actual turnover is taxed. Not only does that mean that it is not comparable with how business rates in other sectors are calculated, but it also penalises successful pubs with rises in business rates and effectively gives handouts to unsuccessful pubs. That does not seem right.
The Smugglers Inn, a successful pub in my constituency, is a case in point. Before the revaluation, its rateable value was £66,500, and it paid £33,000 in business rates. After the revaluation, its rateable value was £125,000, and its business rates £60,000—a rise of 87%. The advice that the landlords received when they complained was to reduce their turnover. I thought that we as the Government of this country wanted to increase productivity, not cut it.
The rate relief provided in the 2017 Budget was welcome, but the £1,000 for pubs and the discretionary amounts available were not distributed quickly; the guidance from Government was slow. I am pleased to say that much of it has now been distributed, but the Government should look at it again. If the same happens again, we need to ensure that the money needed is distributed.
Fundamentally, the problem is that the system is unfair. If we want our pubs to survive, we absolutely must do more to assist them. As has been said, many of them are rural, meaning that their costs are high: pensions, living wage, tax. Burst water mains and power failures, which are common, cost money. They have to use kerosene and LPG, which are much more expensive and must be bought in bulk in advance—
3.41 pm
Sitting suspended for a Division in the House.
3.56 pm
On resuming—