Gov statement 'compromises thousands of firms'
This comes as the Chancellor, former Foreign Secretary Jeremy Hunt, announced today (Monday 17 October) he would “reverse almost all” the tax cuts detailed in the mini Budget three weeks ago.
In his first statement as Chancellor, three days after being appointed, Hunt stated the basic rate of income tax would remain at 20p indefinitely, instead of being reduced to 19p. The Government will also be reversing the freeze on alcohol duty rates.
Night-time economy adviser for Greater Manchester Sacha Lord said: "Today's announcement by the new Chancellor is a clear signal of the lack of leadership at the top of this current Government.
“While we wait to see the impact of these further announcements, and we can only hope they are positive, the key takeaway is the Prime Minister is no longer in charge and those currently making decisions that impact everyone in the UK lack a public mandate to do so.
“For one of the biggest global economies, we are simply sailing too close to the wind with no strategic direction."
Insurmountable level of pressure
Additionally, Hunt stated the planned rise to corporation tax, which was set to increase from 19% to 25% next April, had also been scrapped as well as the abolishment of the dividend tax cut.
However, the rise to national insurance contributions, which increased by 1.25% in April this year, was still set to be reversed next month.
Night-Time Industries Association (NTIA) CEO Michael Kill said: “In less than 40 days in office the Prime Minister has crashed the economy, placing an insurmountable level of pressure on businesses and people's livelihoods.
“The statement from the new Chancellor, may calm the markets, but has critically compromised thousands of businesses and workers across our sector.
“This will create further uncertainty around energy costs after April 2023 and will see alcohol duty add to already untenable operating costs. Our industry is now facing one of the toughest winters on history.”
Furthermore, UKHospitality CEO Kate Nicholls said it was “essential” the Government continued to work closely with the sector as part of its review into support next year.
She said: “I would encourage the Government to work with the UK’s hospitality sector to unlock its enormous potential to support our economy in delivering growth, creating jobs, and driving the recovery.
Further uncertainty
“It’s essential the Government continues to work closely with the sector as part of its review into support post-April 2023.
“One area in dire need of urgent reform is the business rates system, which is currently not fit for purpose and places an unfair burden on hospitality businesses.
“This is particularly pressing now, given the additional costs hospitality businesses will now be facing as a result of the freeze on alcohol duty being scrapped.”
Moreover, the Chancellor announced the energy price guarantee would no longer last two years, but after April next year, a Treasury-led review was to be held to determine targeted support, leaving pubs and breweries to face “crippling energy costs”, according to the Campaign for Real Ale (CAMRA) chief executive Tom Stainer.
Stainer said: “The UK’s pubs and breweries are facing crippling energy costs which are already forcing some businesses to shut up shop for the winter months to ride out unaffordable bills – or close down altogether.
“Pubs already under serious pressure now face further uncertainty about what support will be available with gas and electric bills beyond April next year.
“The Prime Minister had previously said pubs would be one of the businesses that would get extra support beyond the six-month period, the Chancellor must urgently confirm whether or not this is still the case.”
