In case you had not seen, the United Kingdom has a new prime minister, one Andy Burnham, and one of his first decisions was to impose a 20% cut to business rates for pubs and live music venues.
Good news!
It might seem to have been a long, long time since we had a prime minister who might still want to go out, go downtown, so to speak, to have a beer and a meal, or go and see some live music or other arts production.
Pubs, restaurants, entertainment and hotels make High Streets. Nail salons, charity shops and convenience stores do not, or at least they do not in my book.
On a very unscientific conclusion all of my own, Burnham said his music taste comprises “indie” bands such as Elbow, Oasis and The Smiths, that is, critically praised and still cool Manchester rock royalty.
Now, he might have chosen those bands because he was the major of Manchester when the question was asked, but I am more than willing to not challenge his sincerity considering my own record collection contains two of these three bands’ work.
He was major for a decade in a city where sport, music and culture have always been deeply rooted and are not crowded out by other noises, and he was born in Liverpool, probably the only city to rival Manchester in this matter.
All prime ministers start out exceedingly popular, but most end their careers not enjoying the same support.
I like to think I have raised my voice for the High Street in the U.K., with such article titles as “Criticism heard of two scourges of the UK High Street”; “Hotels can save High Streets by creating lots of noise”; “Expect UK business rates 17th in importance in election”; “Hotels have huge part to play in High Streets we’d all want to visit”; “The UK’s ‘left behind’ towns hope for High Street funding and that hotels, retail will follow”; and “Reports on residential cladding and High Street decline point to the need for vision and care.”
The hospitality industry has quite rightly applauded Burnham’s move but now comes the effort to push the recently launched #VATsTheProblem to consumers, not just hoteliers, publicans and restaurateurs.
The campaign has now more than 300,600 petition signings urging a new value-added/sales tax rate of 10% for hospitality businesses, and of course when a new government is formed, there will be optimism that this time someone is listening.
Sentiment is that approximately 70% of insiders say that VAT, food and drink inflation, and increased labor costs are the top challenges for the British hospitality industry, which has Ireland and its 9% hospitality VAT rate sitting very prettily next door.
Also to be kept in mind is that the government has proposed for there to be a 5% rooms tax levied in England, although the new government has yet to comment on that.
When mayor of Manchester, Burnham did support that move, saying that British people pay such a tax in most places they visit in mainland Europe, so why not the other way around?
If that logic is accepted, then the rooms levy becomes a tax on domestic guests.
His answer to that point was that the tax would be used to improve transportation, put on more buses in the early hours of the morning, and pay for more policing and other safeguarding.
Another criticism, or point, is how any cut can be funded. Rob Peter to pay Paul.
Damien Clarke, head of business rates, U.K., at business advisory Knight Frank, sent an email around looking at this.
"The new government recognizes the need for more fundamental reform of a business rates system that has placed a disproportionate burden on our High Streets. But, as ever, the devil will be in the detail. … The biggest question is how these cuts will ultimately be funded," he said.
He added tax relief might be withdrawn from businesses such as vape shops (I would have no objections) and "tackling tax avoidance by sellers using online marketplaces, but it remains unclear how much revenue this will realistically raise, or how such measures will be administered and enforced.”
The devil always is in the details, but the direction of traffic (am I mixing metaphors?) is a good one.
Fingers crossed.
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