Did the CIA fix Business Rates?!
I love a good conspiracy theory, me. I don’t know why, but I’m fascinated by nation-scale deviousness being kept secret by – delete where appropriate – the CIA/MI6/Illuminati/Lizard People/Bilderberg Group/Freemasons, Deep State, etc. I don’t really believe any of them, but I’m always up for a chat over the bar about who really killed JFK, if the Titanic really sank or if Neil Armstrong was actually in a film studio all along. I draw the line at the flat earth stuff, but generally speaking, it doesn’t matter how much truth is to be discovered; they’re just a good bit of banter.
My favourites are the ones about some sort of shady government department working in the shadows with no public oversight, keeping secrets from all of us, working with big business to screw over working people. I really don’t know why, but it fascinates me: who are they? What are they up to? What’s the big secret?!
And so there I was one afternoon in the pub’s office, happily listening to a riveting theory of how the Pyramids of Giza were actually ancient power stations when a letter from the British Institute of Innkeeping (BII) arrived. After a quick natter with the postman I opened the envelope to find my brand new BII membership card, along with a kind of ‘welcome to your union’ type of letter. I was confused… I’d cancelled my direct debit to them a year ago and torn my membership card up in disgust. I had told them at the time that I didn’t trust their intentions or financial backers and didn’t feel comfortable with them ‘representing’ me at a government level, so why was I receiving a welcome letter?
I gave them a call and explained the situation, after which I was told that my membership had been paid for and I was, indeed, a member of the organisation. Baffled, I doubled-checked my bank account and confirmed I hadn’t paid my fees. If I hadn’t paid, who had? I asked her to check, and a few clicks later we had our answer: my membership fees had been paid by my landlord, Punch.
I hung up the phone and sat in quiet disbelief. After a minute, the penny dropped and I started to get an excited feeling. The feeling I get behind the bar when someone is starting a story about how they’ve personally seen proof that Stonehenge was constructed by aliens. That thill when conspiracy is afoot. Surely it couldn’t be? Had I just uncovered a proper conspiracy in the upper echelons of the British pub industry?
It just couldn’t be right that Punch, the company I pay an astronomical rent to, the company that I’m forced to buy expensive beer from, was paying my union fees? Since when does a Pit Boss also own the Union?! And it’s not just the BII – trade organisations like the The Federation of Licensed Victuallers Associations (FLVA), British Beer and Pub Association (BBPA) and UK Hospitality all speak to the government on behalf of us independent publicans, but how often do they reach out and ask us our views? Who funds them? Why am I forced by my landlord to be a member of them?
The thing is, whenever anything big happens to our industry, the government always says it’s ‘listened to representatives of the trade’ and ‘your voices have been heard’, but if our PubCo Landlords control these organisations, then us independent publicans don’t really have a voice at all.
Surely it couldn’t get any worse? We’ve been punished by successive governments with escalating tax raids that have crushed our bottom line. The cost of living crisis has destroyed our customer’s wallets. Hugely above-inflation energy and staffing costs have squeezed our margins beyond belief. And then the one chance we have to make our voices heard is controlled by the very corporations that have blighted our industry for 30 years.
But we have a life-line, don’t we? The government promised to reform business rates, so surely this will be the budget where they stop penalising pubs and change the calculation system?
Nope.
My pub’s valuation has risen 52%, meaning a 292% rise in my monthly bill. And I’m one of the lucky ones. Up and down the country, publicans have been crying out in frustration, anger and disbelief. And when our cries reach the government, what do they say? ‘We listened to the trade’s representatives. Your voices have been heard.’
Now, with all good conspiracies there’s technical details, best voiced – and heard – a few pints deep, so bear with me. Business rates valuations are unnecessarily complicated, but the long and short of it, is that a pub’s business rates are calculated using a different methodology to all other businesses. For pubs, the Valuations Office (VOA) take a pub’s turnover and works backwards from there. What this means, is that pubs run by good operators see sharp rises in bills, whereas other high street businesses such as supermarkets, shops and restaurants don’t see rates rising as steeply because their rates are calculated by using much simpler metrics. Essentially, pub business rates are a regressive form of tax that unfairly punish hard work, creativity and success.
If you’re unlucky enough to be ‘tied’ to your Landlord for wholesale beer purchases, this is a double whammy: my landlord, Punch, slap their own markup on beer purchased through them, so pubs tied to PubCos have to charge their customers much more for a pint just to make end meet. This means they have a higher turnover (regardless of the tiny profit they’re making), and the VOA then punishes them for being in a tied legal situation from which there is little chance of escape.
I’m in the process of appealing my 2023 business rates valuation and have an appeal hearing on February 10th. Throughout the appeal process I’ve been dumbstruck by how pubs are treated differently to other high street businesses in their business rates valuations. It doesn’t make any sense and it’s hugely unfair.
On top of that, the VOA’s valuation process is shrouded in secrecy and I couldn’t get to the bottom of it. After hours of reading and researching I still had too many unanswered questions, and that bit of me that wonders about crop circles at 2am had woken up.
And then I read the VOA’s Approved Guide for The Valuation of Public Houses. It’s long, boring and over-complicated, but it’s what’s on the very front page that counts. When I first saw the logos, I couldn’t believe what I was seeing and what it meant. There, right on the front cover of the document that is responsible for increasing all of our business rates, are the logos of the FLVA, UK Hospitality, the BBPA and yep, you guessed it, the BII.
Just like the theories that get me excited over the bar, this one has all the traditional hooks: an arm’s length government agency (the VOA) working in the shadows? Check. No public oversight? Check. A secretive deal between said agency and big business to screw over working people? Check.
The only problem with this conspiracy is that it isn’t a theory. It’s real life, and it’s affecting every one of us. The business rates reform we all yearn for starts with changing the VOA’s Approved Guide for The Valuation of Public Houses, and the first step must be to wrestle control of it away from ‘member’ organisations either funded by – or supportive of – the destructive corporate forces in our beloved pub industry.
I dearly want to get back to chatting about how there’s certain proof that Elvis didn’t die but actually lived out his days in Glasgow, but the business rates conspiracy needs to end first.
Only then, when pubs are valued fairly, will this nightmare come to an end.
Please follow the Campaign For Pubs on social media where updates of The Bue Bell’s VOA Appeal Hearing on February 10th will be published.
by John Pybus
The Blue Bell, York