An open letter to Keir Starmer by Anthony Pender
Dear Sir Keir,
In the not-so-distant past, prior to becoming party leader and then prime minister (congratulations, by the way), you were our supportive constituent MP and could have been considered a regular at our wonderful venue, tucked away in Somers Town. You may not remember, but we did meet fleetingly on a few occasions, and I couldn’t help but feel you understood the plight of small businesses and even the local pub.
I’ve watched with a sense of foreboding over the last few weeks as media hype and speculation had us believe that the Budget would be unkind to small business and hospitality, but I held back from joining that frenzy and chose to live in hope that you would deliver on your promise to drive change, support small businesses, understand the community value of pubs and protect the working person.
Your government could have delivered real change, a true reset. You could have generated the much-needed tax revenue by creating a fairer tax system with parity. What you chose was the quick and easy smash-and-grab option with some straight-line projections that do not take account of the real-world situation your constituents and wider nation find themselves in.
The taxes you levied on businesses were focused on taking more from small and medium businesses that employ a high proportion of people in relation to revenue. You could have levied taxes on big businesses that have high yields, high margins and move revenue out of the UK. But instead, your government went on the offensive against the small and medium-sized enterprises that are the heart of the UK economy, the growth engine and substantial contributors to the exchequer.
I’ve run The Somers Town Coffee House for 13 years. Over that time, I’ve paid my taxes and renumerated my team well, and when times were hard, was the last person to get paid – quite often reducing my income well below any form of minimum wage. I love what I do, I wouldn’t change it for the world. Running a hospitality business, and particularly pubs, has a real sense of purpose and genuineness. We literally earn money making people happy. We have survived a major fire, covid, the credit crunch, the cost-of-living crisis and austerity. It is a resilient, successful business, and the chancellor’s Budget has put that and a team of 30-plus at risk.
Your taxes penalise small businesses employing local people and that elevate and provide services for local communities. What your policies do not provide is any form of parity with online conglomerates and multinational businesses – something, by your own admission, that needs to happen.
I’d like to draw a comparison at the heart of your own constituency. The Somers Town Coffee House is within 300 metres of a national brand of supermarket. The revenue of the shop is ten times higher than the pub.
Business rateable value – supermarket: £65,500 versus pub: £138,000. While the relief of 75% was a stay of execution, the savings were simply transferred to utility companies, whose costs remain high (especially as they charge higher rates to hospitality due to “risk”). These electricity prices have not dropped, but you are reducing our relief to 40% on a bill that is already disproportionately high. It will cripple pubs and hospitality businesses that are already struggling with higher costs.
As for national insurance contribution and the lowering of threshold, this one is the real sting in the tail. As the pub business has grown (because of well-trained incentivised team and continuous investment), we have created more jobs at all levels and, in turn, paid more tax contributions. On the other hand, over our 13-year tenure, the supermarket has decreased the need for employees through automation of tills while generating greater revenue in a far more tax efficient circumstances – a pattern that will continue as they automate warehouses and distribution. The lowering of the national insurance threshold is an incredibly large bill for small service businesses to foot. It’s essentially a £600-plus levy on each person you employ per year. For our business, this is going to represent a £54,352 bill, with the incremental tax gains of increased national minimum wage and the new threshold. This is for one relatively small pub!
The impact of the above is so far reaching. We use local suppliers, provide jobs and are a hub for the local community that you yourself have used frequently. These increases will close pubs and other small businesses. The intention to gain more tax revenue will have the opposite effect with zero receipts.
We need change and quickly. My request is simple. We don’t want handouts or “support” – we want parity that supports small businesses and the 3.2 million people who work in hospitality. On a personal level, I just want fair pay for the work I do and the risk I take in running a pub. As a small business in your constituency, this is the true detail and impact of this year’s chancellor’s Budget.
Yours faithfully,
Anthony Pender
Anthony Pender is the founder of Our Yummy Collection, which includes The Somers Town Coffee House in London’s St Pancras