Clamour grows for reform of ‘broken’ business rates: Retailers have long demanded changes to the business rates system, which many regard as an unfair tax, out of step with modern shopping, but rarely has the clamour been as loud as it is today. The Times reports that retail casualties, including those of Wilko and Paperchase, and the closures of about 6,000 store sites in the past five years have prompted the industry to revive its campaign to reform the “crippling” system. Olly Tress, the boss of Oliver Bonas, the fashion and homewares chain, argues that the property tax is a “terrible laggard” for companies operating shops, pubs and restaurants and “needs to be reformed, but the government doesn’t seem to have the spine to actually do it”. All commercial businesses were awarded 100% relief until July 2021, when 75% relief up to a cash limit of £110,000 per business was introduced, meaning that larger companies had to start paying in full again. The relief for small to medium-sized firms ends next April, which the BRC fears will add £400 million to the cost of doing business. The owner of one pub near Tower Bridge, south London, said the uplift would be a nightmare: “With energy bills, 9% staff wage rises for our key players to retain them and VAT, all we really do is work for the government and HMRC.” Some industry onlookers suspect the government is likely to renew the relief for at least another year in, or before, the autumn budget to avoid “cliff-edge change”. According to John Webber, head of business rates at Colliers: “As the cash cap on relief per business is currently £110,000, this will continue to benefit only smaller and medium-sized businesses. The main employers in the high street up and down the country are larger retailers that have not benefited nor will benefit from this relief, but will continue to pay a tax of in excess of 50% on the rental values of their premises.” Webber said the problem with continuing rates relief was that any plans for change were kicked down the road. “The government has created a rod for its own back, because the longer these reliefs continue, the greater the reliance of companies in their models to the fact that they pay little or no business rates. When that tap is switched off, keys will be handed back and businesses will close.”

Britain could see interest rates rise further as pay growth remains high: UK wages are rising at their fastest pace on record and more quickly than in most other major economies, adding to pressure on the Bank of England to further raise interest rates. The FT reports that official figures show that in the three months to June, nominal regular pay, which excludes bonuses, rose at an annual rate of 7.8%, the highest since records began in 2001 and much faster than in the US and the eurozone, where wages are rising by just over 4%. Markets believe that both the Federal Reserve and the European Central Bank are at or near peak interest rates, but they are pricing that Britain’s central bank will raise them by another half percentage point to 5.75% by the end of the year. Although the tightness of the UK labour market is easing, demand for workers still far outstrips supply, with over one million unfilled job vacancies in the three months to July according to official figures. That has helped push up wages across many sectors, with the impact of higher interest rates only starting to show in slowing pay growth in construction. Faced with high vacancy rates – there are currently 124,000 unfilled jobs in the hospitality sector according to the ONS – hospitality businesses have been forced to offer generous pay rises simply to retain staff. The government’s decision to up the hourly minimum rate by nearly 10% to £10.42 has also added to the wage bills of restaurants, pubs and hotels. Wages in accommodation and food services rose at an annual rate of 6.5% in the three months to June, up from 4.4% in the previous three months according to the ONS. Jonathan Neame, chief executive of Shepherd Neame, said the minimum wage hike was the “main driver” of wage growth in the sector. But Baton Berisha, chief executive of the upmarket restaurant group the Wolseley, said: “Lack of workforce has driven wages up considerably, since Brexit we have less people in general working in hospitality and therefore everyone had to increase wages.”

Former Hawthorn Leisure CEO Mark Davies to lead Primary Health Properties: Primary Health Properties, one of the UK’s leading investors in modern primary healthcare facilities, has appointed Mark Davies, formerly of Hawthorn Leisure, as its new chief executive with effect from the conclusion of its Annual General Meeting to be held on 24 April 2024. He will succeed Harry Hyman, chief executive and founder of PHP. Davies was co-founder director of NewRiver REIT plc in 2009 and played an important role in taking the company from IPO to the FTSE250 in seven years. He was chief financial officer of NewRiver for over twelve years and, alongside this role, was also chief executive/executive chairman of Hawthorn Leisure for five years. He stood down from the board of NewRiver following the successful sale of Hawthorn in July 2021 to Admiral Taverns for £222.3m. Davies has considerable capital markets experience and over the last fourteen years has raised over £3bn of equity and debt in public and private markets. He is currently the senior independent director at Palace Capital PLC, a London-listed REIT. Davies told Propel: “There is a significant long term strategic opportunity to own, develop and modernise healthcare assets and PHP has a high-quality portfolio which is well positioned to continue creating sustainable value from community health assets with a social purpose. Since selling Hawthorn in 2021 I have maintained a keen interest in the pub and hospitality sectors and in my new role I will be equally as focussed on people and communities and investing in a social purpose just like I was when I was running Hawthorn and NewRiver. Having worked in the property sector for over 20 years, my experience has covered pubs, hospitality, retail and leisure. Looking to the future at PHP, I will carry with me these experiences of managing and developing assets in the heart of their communities and delighted I can continue to work in a sector that daily supports all people up and down the UK and Ireland.”