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Wed 8th Mar 2017 - Borg-Neal – Budget rates relief of ‘little use’ to Oakman Inns
Borg-Neal – Budget rates relief of ‘little use’ to Oakman Inns: Peter Borg-Neal, chief executive of 18-strong Oakman Inns, has said the Chancellor of the Exchequer Philip Hammond’s sector-specific rate relief in today’s Budget will be of “little use” to his company. The chancellor offered a sector-specific £1,000 discount on pubs with a rateable value of less than £100,000 to help protect pubs against increased business rates. He said the discount would be available to 90% of all pubs. Borg-Neal said the chancellor’s move did “nothing to lessen the impact” of the business rates revaluation, which he branded a “ridiculous and unfair system”. He said the announcement meant Oakman Inns would open two fewer pubs this year. Borg-Neal said: “While the sector-specific reliefs announced by the chancellor will bring some small benefit to thousands of pubs, it will be of little use to Oakman Inns. Specifically, it means the proposed pre-budget 45% increase in costs becomes an increase of somewhere between 43% and 44% which is, by any measure, simply unjustifiable. Of course, smaller pubs, such as those in rural areas, will benefit. However, those are not the pubs we have invested over £40m in acquiring and redeveloping. Those are not the pubs that are generating employment growth – we now employ over 500 people. This ‘relief’ does nothing to lessen the impact of this ridiculous and unfair system. The result of the increase in business rates will inevitably reduce our profits and, consequently, our ability to raise further investment funds through bank debt. This has an immediate impact as we will now open two fewer pubs in the coming financial year. Given the average Oakman Inn pays annual taxes of circa £496,000 it will mean a net reduction in income to the Treasury. Furthermore, the decision to once again delay for the foreseeable future a ‘root and branch’ review of the business rates system is deeply disappointing. It displays a woeful lack of understanding of the economic impact these unplanned and irregularly timed actions have on businesses of our size. The chancellor’s refusal to adequately address the issue might have some merit if it was fair. However, this unreformed and archaic system of property taxation doesn’t impact on the bottom line of online traders such as Amazon and even financially benefits companies such as Sports Direct, whose working practices are considerably more ‘robust’ than our own and are unlikely to earn any recognition of their efforts towards better employment. I set up Oakman Inns with my first pub in Tring in 2007, and we now run a group of 18 sites. We are a quality employer and have been recently ranked eighth in the Sunday Times 100 Best Companies to Work For. Our premises are of high quality and our average development cost is well over £1m. It seems we are being punished for our approach to business. A shop next door to mine is an identical site but with lower sales, fewer employees, fewer overall costs, less contribution to the community and roughly the same profits will be charged much less. Even within our own industry, I feel Oakman is being punished for investing more money, creating more jobs, training more staff to have good careers and trying to support the communities we serve. Because we have worked hard to modernise the concepts of the old-fashioned boozer or high-street bars that have lower sales and much lower costs, we are paying the price. This ridiculous, regressive tax encourages the wrong type of business and we are disappointed and outraged by this lack of basic financial common sense.”



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