While Chancellor Jeremy Hunt yesterday (Wednesday 15 March) declared the duty on draught products in pubs would be up to 11p lower than the duty in supermarkets from August, he failed to mention any further support on rocketing energy costs for businesses.
British Beer & Pub Association chief executive Emma McClarkin said: “The cut to draught duty as part of the alcohol duty reform is positive and we hope it will result in a boost for our pubs this summer.
“However, the fact is, our industry will be facing an overall tax hike not a reduction come August.
“Duty on non-draught beer will rise and the measures introduced today won’t rebalance the catastrophic impact soaring inflation and unfair energy contracts.
“Businesses are nervously awaiting what’s next for their energy costs, and a lack of support in today’s announcement will have a direct impact on their ability to keep their lights on and doors open.
Urgent measures
“We need the Chancellor to unlock growth opportunities for businesses of all shapes and sizes."
Furthermore, British Institute of Innkeeping (BII) CEO Steve Alton claimed many firms had “no choice” but to take “unfair and untenable" energy contracts and the impact of this combined with wider inflation and wary consumers left businesses “fragile and facing an uncertain future”.
Additionally, despite industry-wide calls for reformation to business rate and VAT reduction, the Conservative Party’s Spring Budget failed to offer anything new to the under-pressure on-trade.
Scottish Licensed Trade Association (SLTA) managing director Colin Wilkinson said: “If the Chancellor were to reduce VAT for hospitality, it would send out a clear and unequivocal message that he recognises the importance of the sector to the economy.
Further reading on the Budget:
- Duty inequality with supermarkets 'economically counterproductive'
- Axed energy support may cause mass closures
- Duty hike ‘bitter blow’ for drinks firms
- BrewDog boss: freezing duty worthless if you can’t heat your pub
- Sadly, it's not a joke Mr Hunt
- End of energy support will put trade in 'unsustainable predicament'
- Failure to address business rates reform will ‘anger’ sector
- Spring Budget 2023: No apprenticeship levy reform
- Hunt announces 'British ale is warm but the duty on a pint is frozen'
“We need to see a host of urgent measures to help businesses, including a reduction in the rate of VAT and lower business rates.”
Alton echoed this, stating the BII would “continue to make the case for a full overhaul of the outdated and unfair tax system”.
However, UKHospitality (UKH) chief executive Kate Nicholls stated with vacancies for the sector 56% higher than pre-pandemic, the measures announced yesterday were “significant” in incentivising people back to work and would “hopefully alleviate crippling labour shortages”.
Crisis after crisis
She said: “The significant reforms to childcare and measures to help the over 50s re-enter the workforce are both areas on which UKH has been calling for action and we’re pleased the Chancellor has recognised the help it can offer tackling the enormous vacancies in hospitality.”
Though the Chancellor did not announce a reform to the apprenticeship levy despite hospitality firms claiming it was “holding back investment”.
Nicholls added while the reduction in draught duty was “positive”, it was “vital” suppliers and breweries passed this benefit through to venues.
Additionally, while Hospitality Ulster chief executive Colin Neill said there was “not much mentioned” in the statement for the trade body to be “enthusiastic about”, the beer duty reduction being extended to Northern Ireland was “welcome”.
Overall, the budget did not go “far enough and will see a huge swathe of SMEs continue to struggle financially or disappear in the coming months”, according to Night-Time Industries Association (NTIA) CEO Michael Kill.
He added: “This Government continues to overlook thousands of independent businesses, including nightclubs, venues, festivals, events, theatres, casinos, suppliers, and millions of employees and freelancers across the Night-Time Economy.
“[Businesses] are continually having to firefight crisis after crisis, from onerous operating costs to rail strikes, supply chain issues and workforce shortages, and no meaningful support to stem the immediate situation.”
