Right now, things are so bad in the North we feel we don’t exist in the business world, and especially within the hospitality and catering industry.
Restaurants and pubs are major employers yet there are so many that have closed down in recent years – but the problem still does not seem to be recognised by the government.
I feel the main problem is caused by the 2010 commercial rates that were set in 2008 by the last government based on the high commercial rental and property values at that time but, as you know, those rental and property values crashed in 2008 and have not been adjusted by the government in line with the present recession and present market property and rental values. As a result, businesses cannot afford the rates, and this applies to all businesses including big businesses across the country.
The Government are blaming landlords for the closing of business because of high rents, which is rubbish: you can negotiate a rent reduction with the landlord because he will have to pay rates on his empty property but you cannot negotiate a rates reduction with the your local council – they will just close down your business. This is why hundreds of pubs, restaurants and nightclubs are today lying empty, and thousands of people have been put out of work.
90% of the businesses that have failed could not afford their commercial rates. I have spoken to many administrators and they all say the same thing: you can make an application to the VOA for a rates reduction, but the application will take 1 to 2 years to be looked at by the VOA and you have to continue paying the new rates in the meantime. By the time the rates have been reviewed, the business has been closed down by the council because the business cannot afford the commercial rates.
In my own case: I own a restaurant and the commercial rates in 2008 were £21.5k per year. The new rates for 2010 came in at £78.5k. I wrote to the Prime Minister who got personally involved and the VOA reduced the rates by £22k – still a major increase from £21.5k in 2008 to £55k. My business is now for sale.
To conclude:
– For the landlord and council: no rent and rates being paid
– For the business: no money to re-invest
– For the individual: no job, dole
– For the country: mass unemployment, social security payments
This ‘Opinion’ written by Joe Farley