The letter urges the Government to extend the energy price cap to small businesses and supply to joint residential and commercial premises and extend the current 12.5% VAT rate for food and drinks sold in pubs and the wider hospitality sector with a view to making this permanent.
It also wants the Government to ensure ADR (alternate dispute resolution) proposals are in force by no later than February 2023, with an increase in the lower-strength threshold for beer from 3.4% to 3.5% ABV and a container size of 20 litres or above for the draught beer reduction.
And has called for the reduction of the disproportionate burden on hospitality businesses through either a permanent specific sector multiplier or a high streets relief, expedition of an ‘online sales tax’ to offset the cost of pubs’ rates and provision for a fairer business tax regime for the digital age.
Major headwinds
The BBPA said as the sector emerges from the pandemic, it continues to face major headwinds that jeopardise its recovery. With the energy crisis causing regular 150%-plus rises in pub energy bills, wiping out any hope of a return to profitability in the near future, and a return to the 20% VAT rate set to prove extremely damaging to the sector.
A new study by Oxford Economics has calculated that despite the significant Government investment in the sector during Covid, more than 800 pubs closed their doors for good during this time. Many profitable brewing businesses have also been lost and for those that remain, debt levels have spiralled and the future is very uncertain.
It added that as key financial support measures have now been withdrawn, trading levels have still not returned to pre-pandemic levels, costs are rising sharply and confidence among many pubgoers remains fragile but said with the right support, the sector has a pivotal role to play as the UK recovers from the pandemic and moves forward with levelling up and regenerating towns and high streets.
Heart of communities
BBPA chief executive Emma McClarkin said: “Our sector can deliver jobs and additional economic value in every part of the UK. We are at the heart of communities fostering social cohesion as we reconnect and recover. This is why we are calling on the Government to heed the calls of our Long Live the Local campaign and support the sector during this energy crisis.
“Pre-covid, our businesses were already operating under tight margins due to the disproportionate tax burden that we face. As we come out of the pandemic, it is crucial this is redressed to ensure business not only survives but indeed returns to sustainable growth that will, in turn, support the Levelling Up and High Streets agendas.”
