By Daniel Hunter
The introduction of a late night levy on businesses catering for the UK’s evening economy will hit the already struggling pub sector and further harm the profitability of high streets.
That is the warning from the Forum of Private Business in a letter to Lord Henley, who has been appointed by the Government to conduct a consultation exercise looking at the controversial proposals.
But the Forum says any such levy would be little more than a stealth tax against business, and in the letter argues that it also flies in the face of the Department for Business, Innovation and Skills’ moratorium on new regulations for small business.
The not-for-profit business support group is opposed to the levy concept in general which, it points out, is fundamentally contrary to the recommendations of the Portas Review — a report which makes the case for town centres to once more become a focal point of the communities they serve.
Last week the Government announced it was accepting virtually all the recommendations in the review following months of investigations by retail guru Mary Portas.
“It’s a huge irony that last week Communities Minister Grant Shapps wholeheartedly embraced the contents of the Portas Review, and remarked on the need to make high streets central to communities across the country," Chief Executive at the Forum, Phil Orford, said.
"Yet on the other hand we have a Government plan taking shape to introduce a new stealth tax which directly targets high street businesses. It’s hardly joined-up thinking.
“We would also say this goes against the moratorium by BIS for new regulations for small firms. The Government argues it is business friendly, but then sends out a completely different message.”
The Forum also argues that a levy would simply create more misery for small pubs just as the industry is shrinking at its fastest rate ever.
“Small pubs, like the rest of the small business community, are really struggling due to the current economic climate. Consumer spending is low, while business costs are on the increase — business rates have just gone up by 5.6%," Mr Orford added.
“Our members complain that business rates don’t represent value for money, so being forced to pay up to £4,400 a year to subsidise additional services is a massive slap in the face. The pub industry as a whole is already struggling and the introduction of a levy would pile further pressure on the sector.
“The Forum believes imposing a levy is not the best way to deal with the issue of late night drinking either. Drinking culture is a complex issue, and won’t be solved simply by crudely levying extra taxes on firms which is a sticking plaster approach at best.
“Frankly, extra taxes merely hurt the smallest businesses at a time when they should be growing and stimulating the private sector.”
In its letter to Lord Henley, the Forum outlines a need for the Government to encourage councils and local communities to develop voluntary schemes and initiatives.
“Crime is a concern for small businesses as well as local authorities, so it would be in their interest to work in partnership with local communities,” added Mr Orford.
“As acknowledged in the consultation document, such work is already underway, in the form of Community Alcohol Partnerships and Business Improvement Districts; models which could be promoted as examples of best practice.”
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