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Pub and restaurant industry bosses call on chancellor for business rates reform after series of closures

PUBLISHED: 13:00 12 March 2018 | UPDATED: 08:42 13 March 2018

Burger restaurant Byron is one of several chains which has made cuts in recent months. Picture: Louisa Baldwin

Burger restaurant Byron is one of several chains which has made cuts in recent months. Picture: Louisa Baldwin

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Leaders in the restaurant and pub trade have called on the chancellor to tackle business rates, warning the industry is at “tipping point” ahead of today’s Spring Statement.

Hospitality bosses and groups have written to Philip Hammond to ask for support for a sector being squeezed by rising costs on several fronts.

It comes as restaurants Prezzo, Jamie’s Italian and Byron have all closed eateries as part of restructures in recent months.

READ: Special Report – Why are restaurants struggling in Norfolk?

The letter, signed by the chairman of Mitchells and Butlers and the chief executive of Bill’s, said government action was needed to “avoid damaging closures and job losses”.

“The sector is at a tipping point and needs focused attention now,” it added.

Steve Hutton, founder of restaurant chain Middleton’s Steakhouse and Grill, which has restaurants at King’s Lynn, Colchester and Norwich, said rates were part of a bigger picture.

“I do entirely share the industry’s concerns that reduced footfall, rising wages and food costs have already caused mass casualties, so increased business rates is really not helping,” he said. “We were very fortunate that most of our business rates stayed the same [in the revaluation], but that is also because most of our sites sit slightly off prime retail pitches.”

Suffolk restaurant owner Richard Sunderland, co-owner of The Crown at Stoke-by-Nayland, warned that the hospitality sector is facing “cataclysmic” conditions and described business rates as an “archaic tax system”.

“I don’t think there has been a more difficult time to run your business in the UK,” he said. “If anyone was setting up their own business in the UK now, I would say have a very, very good look at what you are proposing.”

A separate letter from trade bodies including UKHospitality, and the Campaign for Real Ale said there should also be a consultation on a possible reduced rate of VAT for the hospitality industry and changes to alcohol duty.

A PwC report in 2017 warned rapid expansion in the restaurant industry, particularly among chains, could cause difficulties as the focus shifted from quality to quantity, making it hard to keep up with costs.

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