BBPA: 'we need to see a reduction in the cost of doing business'

Chancellor Rachel Reeves​ yesterday (Monday 29 July) announced the results of a report by Treasury officials, which looked into the state of public finances, after pledging to plug the £20bn “black hole” in the funds left by the previous Conservative Government. 

Speaking in Parliament, the MP said the report showed the Tories had “spent like there was no tomorrow because they k new someone else would pick up the bill”.

However, as Reeves prepares for her first Budget as Chancellor in October, the BBPA has urged her to deliver the business rates reform pledged in the party’s pre-election manifesto​ and confirm the “vital” rates relief would be maintained.

BBPA CEO Emma McClarkin said: "The beer and pub sector is committed to serving communities, creating jobs and providing critical economic growth across the country. In order to deliver this, we need to see a reduction in the cost of doing business.

"During the election campaign the Chancellor highlighted the importance of supporting Britain’s beer and pub sector when she announced a five-point plan for pubs.

“Central to that plan was the need to reform the business rates system that currently penalises bricks and mortar business like pubs, which pay five times more than their share of turnover.

Critical reform 

“While the Treasury work out the details of how best to implement this critical reform, we need the Chancellor to confirm the vital 75% relief will be maintained so one of the core cost components of doing business can be controlled.”

Moreover, operators from across the sector recently shared their concerns regarding the proposed changes to the National Living Wage​ (NLW).

In addition, in order to make sure the price of a pint remains “affordable”, the industry trade body urged Reeve to cut beer duty and to examine VAT rates.

This comes as the cost of a pint of draught lager in pubs was found to have increased by 4.5% in the year to June 2024​, according to official figures from the Office for National Statistics (ONS).

McClarkin continued: "The European football championship brought into sharp focus just how much British beer drinkers are been taken advantage of, especially when you consider that British duty rates are twelve times those of Germany or Spain.

"As the Chancellor prepares for her first Budget over the summer, we have also called on her to examine what the optimal VAT rate should be for pubs selling soft drinks and food as part of a fair and sustainable tax and regulatory framework for pubs that both supports economic growth and underpins the social and community value that pubs uniquely provide to local communities."

Meanwhile UKHospitality (UKH) Allen Simpson implored yesterday's announcements made investing in growth "more important than ever".

"Our sector is well placed, with presence in communities across the UK, to help the new Government get the economy moving, provide more people with jobs, invest in the future, and bring in the taxes needed.

Challenging times

“Hospitality is the right lever to pull because the effect is so quick and reaches the whole of the country. We hope in the October Budget, the Chancellor will deliver on the manifesto promises to back the sector’s growth", he continued. 

In addition, the Night Time Industries Association (NTIA) said it would be "closely monitoring" the developments and potential solutions being considered by the Government following the address in Parliament yesterday, adding it anticipated "difficult decisions" lay ahead for the Autumn Budget.  

NTIA CEO Michael Kill commented: "We are relieved that, for now, our sector remains unaffected. However, we must emphasise the night-time economy is extremely fragile. Any abrupt changes in the upcoming budget, such as reductions in the current relief on Business Rates or increases in taxation, could have catastrophic consequences for our industry.

"What we urgently need is a comprehensive budget that fosters stability and generates growth, considering the unique challenges faced by property-led businesses through business rates and cultural businesses through a potential new VAT cut.

"This support is crucial to help us navigate the period between reaching the recently achieved 2% inflation rate and the time it takes for this figure to show tangible reductions in current operating costs, thus supporting frontline businesses grappling with exorbitant expenses. 

"As we await the Autumn budget, we urge the Government to recognise the delicate state of the night-time economy and to implement measures that will sustain and support our industry through these challenging times."