Welsh government slammed for 'disastrous' rates surge across hospitality

Welsh hospitality businesses have been hit with a £122m hike to its business rates bills over three years following a “disastrous” budget.

 

UKHospitality Cymru has criticised the Welsh Budget, delivered earlier this week, for accelerating high street decline, job cuts and business closures by excluding hospitality from business rates reform.

 

Its analysis revealed that by also ending current business rates relief and providing inadequate transitional relief, the sector’s business rates bill will increase by £29.4m next year, £40.1m in 2027/28 and £52.6m in 2028/29.

 

This would equate to business rates increasing by 63% over the next three years.

 

The cost rises have been compounded by rateable values increasing by 23% on average for the sector.

 

David Chapman, executive director of UKHospitality Cymru, said: “This Budget is disastrous for Welsh hospitality. The scale of these shattering increases will be unsustainable for many businesses and the decision to exclude hospitality from any support will only drive further job losses and businesses closures.

 

“Communities and their local hospitality venues will be the ones bearing the brunt of an unjust system that has long been broken, despite promises to reform it for the better.

 

“The system is in dire need of reform and the Welsh Government’s efforts barely touch the side of what is required.”

 

He added: “It is now vital that the Welsh Government commits to using, in full, any additional funds flowing from additional support in England to support hospitality businesses. All political parties seem to agree that hospitality is unfairly treated by the business rates system, yet still nothing happens. That must change.”

 

The warning comes as pressure mounts on government to share more details on the business rates support package for pubs, which the Treasury hinted at in early January.

 

In a House of Lords debate on business rates: retail, hospitality and leisure held on Tuesday (20 January), Lord Livermore (Labour) said: “The revaluation means that pubs and others will struggle in relation to the business rates applicable to them. That is why we are working with the sector to ensure that it gets the support it needs. Noble Lords will have heard what the prime minister and the chancellor have both said on this in recent days. I will not add to that now or comment on speculation.”

 

Speaking at the World Economic Forum in Davos yesterday (21 January), chancellor Rachel Reeves indicated that previously pledged business rates relief would not extend beyond pubs.

 

Reeves’ comments at Davos come hot on the heels of an open letter which was sent to her by 130 of the UK’s biggest hotel and holiday park operators, including Whitbread, Hilton, Butlins and Haven, calling for hotels to be included in any rates relief package.

 

Earlier this month, UKHospitality Scotland expressed frustration towards the Scottish Budget, which it said “missed the mark spectacularly on business support”.