This was a measly and mean budget for small businesses. For towns like Ludlow, there is no cheer at all from the Budget statement today.
In recent days, there were growing hopes the Chancellor would do act to ease the rates burden on business, especially the retail sector. Philip Hammond made three announcements on business rates and none of them pass muster.
Today’s budget will lead to many local independent businesses going to the wall. I really fear we are set to lose several of the businesses that attract people to Ludlow’s town centre.
Like many market towns, our pubs help define the character of the town centre. But with this budget, they are really under threat.
The Chancellor announced that he is giving a measly £25 million pounds back to pubs to help them cope with punitive business rates rises. At the same time he is raising an extra £2.2 billion in alcohol taxes over the next five years.
Ludlow’s 19 pubs are facing a whacking increase of rateable values of up to 500% from April. Their business rates over the next five years will total nearly £1.7 million pounds. The chancellor is offering relief of just £1,000 a pub. That’s £19,000 in all for Ludlow, around 1% of the rates bill over the next five years.
On top of this, from Monday duty on alcohol will go up by the retail price index (RPI) each year. With RPI running above 2%, the higher prices in pubs will increase the risk that many will go out of business.
Today, Philip Hammond pledged that businesses losing small business rate relief will pay no more than £600 extra a year. I can’t see this will help Ludlow at all. The biggest rate rises we are facing in the town are for retail businesses that do not qualify for full small business rate relief at present. They will get no relief from this measure. Independent retailers in Ludlow are still facing a 27% rise in business rates by 2021/22.
The Chancellor says that small businesses can apply for a discretionary relief from a fund worth £180 million next year. In my view, any taxation system is on its knees when those penalised by it must plead for relief. And £180 million spread across more than 300 councils is not enough money to deal with the scale of the problem.
Today’s budget will undermine our high streets and eat at the heart of our market towns. Independent traders do so much here in Ludlow. Our town would not be the same without them. But I fear for their future. I fear that Ludlow’s high streets will become full of chain, charity and betting shops, just like so many failing town centres around the country.
Returning to pubs, I have just been listening to Olly Parry on Radio Shropshire. He runs the Salopian in Shrewsbury and says that one in five pubs could close because of the rate rises. If pubs close, breweries will fold. If breweries shut, who will buy the barley? Olly’s view is bleak. I fear he may be right.