Outlining his Budget yesterday (Wednesday 3 March), Chancellor Rishi Sunak announced that the temporary reduction in VAT from 20% to 5% on food, soft drinks and accommodation would be extended for a further six months until 30 September.
Other measures also included extending the business rates holiday until the end of June and extending the Coronavirus Job Retention Scheme (CRJS) until the end of September, with employer contributions on wages beginning in July.
There will also be a freeze on alcohol duty increases for the second year running.
However, community pub operators said they feel excluded by the Budget, after lobbying the Chancellor to extend the VAT cut to alcoholic drinks.
Inevitable disappointment
Jon Orman, runs micropub the Old Star Ale & Cider House, in Shoreham, West Sussex (pictured), and described the Budget as an “all too inevitable disappointment.”
“There was very little positive to take away from it, although it is good for the industry as a whole that beer duties have been frozen,” he explained.
“Looking forward, we are just faced with what seems like an interminable wait to reopen. All in all, a sense of frustration prevails.”
Another licensee to share Orman’s reaction was Andrew Clennett, who said on Facbeook he felt “marginalised by people who do not understand how we work.”
He highlighted that the business rates holiday would cease shortly after many pubs could reopen, in late May.
After June, rates will not go back up to the standard rate but will be reduced by about 67% up to £2m for closed businesses with a lower cap for those who have been able to open, for nine months.
Many businesses are waiting until stage three of the lockdown easing - at the very earliest, 17 May - to reopen, when indoor service is permitted.
However, many community locals will struggle to operate at a profit until restrictions on mixing between households indoors and a table service requirement are lifted.
More freedoms on socialising will be allowed in stage four of the Government’s roadmap, from 21 June at the earliest.
Left out
Matt Todd runs a micropub in the Hampshire countryside, the Wonston Arms, which has not traded since before the second lockdown in England, in November 2020.
The operator had hoped the Government would listen to the industry’s calls to expand the VAT reduction to sales of alcohol.
The latest extension is “completely irrelevant,” to his drinks-only venue, he said.
He said: “It's a bloody nightmare for me, I feel discriminated against as a wet-led pub. It feels like Rishi Sunak and the Government do not understand what hospitality means and these small community wet-led pubs are the very basis of what pubs started as. We are the original pub and we have been left out. I'm very dejected."
The Wonston Arms fully adapted to outdoor service last summer, meaning Todd is looking forward to when beer gardens are allowed to reopen from 12 April.
The latest Restart grants will help the site survive until then, however Todd is worried that consumers lifestyle habits have changed over lockdown and trade will be slow to rebuild.
Chief executive of Admiral Taverns, Chris Jowsey said measures including the extension of furlough and grants of up to £18k would ”provide a vital lifeline for our licensees.”
Long term future
Jowsey added: "It remains the case however that community wet-led pubs across the UK have suffered immensely during the pandemic and these grants alone are insufficient to ensure they have a longer term future.
“Community pubs receive no benefit from VAT cuts on food alone and will now be expected to pay business rates from the moment restrictions are lifted.”
Jowsey also joined campaigners’ calls on the Chancellor to reduce beer tax to further support pubs.
Long Live the Local campaigner and operator of the Half Moon pub in West Sussex, Jodie Kidd, welcomed the freeze but said more was needed to help pubs.
She said: “However, The Chancellor has only partially listened to the 500,000 campaign supporters who signed the petition calling for a cut in beer duty.
“Our Government must recognise the vital role that local pubs and brewers can play in the much needed social, cultural and economic recovery this country needs.
“I urge them at the earliest opportunity to address the unfairly high rate of beer duty in the UK which is 11 times higher than other countries such as Germany and Spain."
