Hospitality leaders warn business rate hike could damage thousands of businesses

Hikes in business rates planned for 2012 would damage thousands of British businesses.

That's the message from several hospitality industry leaders who have joined forces to write a letter to cabinet ministers Eric Pickles and Vince Cable.

The British Beer and Pub Association (BBPA), the British Hospitality Association (BHA) and Business in Sport and Leisure (BISL) all warned that next year's rate rise of 5.6% was "unprecedented" and would add huge pressure to Britain's hospitality and leisure sector.

The trio called for a rates freeze, which it said would send a "very positive message" to business, encouraging investment and promoting entrepreneurial activity.

Brigid Simmonds, chief executive of the BBPA, said: "Council tax has been frozen by the Government - and rightly so. Given the benefits it could bring, we need the same approach for business rates. Our leisure and hospitality sector is dominated by small businesses, like pubs, hotels and restaurants, and they are absolutely key to creating new jobs"

Ufi Ibrahim, chief executive of the BHA, added: "We need a rates freeze. The VAT rise in January hit our businesses hard, with extra taxes on pub and restaurant food, while supermarket food remains zero rated. This is widening the gap between eating out and eating at home. There is no justification for further pain in what are labour-intensive parts of the economy, where jobs can be created."

Dominic Harrison, chief executive of BISL, commented: "Business rates are one of the highest costs on businesses. They feed through to the prices of goods and services, reducing customer visits. A freeze would send a clear signal that the Government really understands that we are vital to generating growth and jobs in the economy, and growing our way out of recession. With current uncertainties, the timing couldn't be more vital."

By Neil Gerrard

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