Sector calls for clarity & action as Labour marks 100 days in power

From a potential smoking ban​ in pub gardens, to proposed restrictions on opening hours and possible alcohol duty increases as well as the introduction of the Employment Rights Bill​, the party has had a busy three months.

In April this year, ahead of the general election​, the party laid out its five-point plan to “revamp​​” empty and boarded up pubs, including stamping out late payments alongside business rates reformation.

Labour then further committed to reforming business rates in a bid to support high streets in its manifesto released on Thursday 13 June.

The manifesto also pledged​​ to cut down on antisocial behaviour with more neighbourhood police and implement a windfall tax on oil and gas giants as well as reduce waste by moving to a circular economy.

However, voices from across the sector have repeatedly urged the Government to be clearer on its plans for the future and make good on its pre-election promises during these first 100 days and in the run up the party’s first fiscal address later this month.

Foundational role

British Institute of Innkeeping (BII) CEO Steve Alton told The Morning Advertiser (MA):​ “Our new Government has been clear that growth, employment and regenerating highstreets & communities are at the heart of their plans. 

“And our sector has huge potential to deliver against all these priorities, but Government investment will be key to unlock their full potential.  

“Engagement with Ministers and officials has been positive, with recognition of the foundational role of pubs in their communities and local economies.  

“But it has never been more critical for words to be matched with actions at the upcoming Budget”.

Alton added the Government needed to make extending the current business rates support and reducing the “unfair level of taxation” faced by pubs a “priority” in order to protect the sector against “unnecessary failure”.

Speaking at 10 Downing Street on Tuesday 27 August, Prime Minister Kier Starmer asserted tough decisions would need to be made ahead of the Budget in October, which he said would be “painful”.

However, business secretary Jonathan Reynolds MP told The MA​ the Government understood the importance of acting to tackle challenges faced by the hospitality sector, in particular making good on its promise to reform business rates.

“We hope that during the next 100 days in power the Labour Government will have made progress in implementing support for pubs, clubs, brewers and cider makers.” 

Though a snap poll conducted by The MA​ shortly after Labour were elected in July revealed 42% of operators did not feel very confident​ the new Government would prioritise the hospitality sector.

Moreover, two-fifths (40%) of the 141 respondents were not at all assured the new Government would prioritise hospitality firms, while 16% of voters were somewhat confident. Just 1% of participants felt very confident.

The Campaign for Real Ale (CAMRA) national chairman Ash Corbett-Collins said: “The new Labour Government promised to reform the unfair business rates system that is weakening pub businesses, which we expect them to deliver in this Autumn Budget.

“This is on top of extending the 75% Relief until a fairer system is in place. Additionally, we’re calling for an extension of the draught duty relief on pints in pubs, which is essential for them to compete against supermarkets selling alcohol for drinking at home.

“A lack of change in [this way] could be detrimental to the survival of pubs, social clubs and taprooms, with growing closures in the hospitality sector due to financial strain likely to continue. 

“We hope that during the next 100 days in power the Labour Government will have made progress in implementing support for pubs, clubs, brewers and cider makers.” 

Finding its feet 

OakNorth Bank senior director of debt finance Mohith Sondhi said it was “too early to say” what impact this Labour Government could have on the sector, but that the “negative noise” regarding a black hole in public finances, scrapping winter fuel payments and further “painful” choices had knocked consumer confidence.

“Hospitality is very much a consumer confidence led business and there is a fine line between managing people’s expectations about the future and causing a recession by making consumers reluctant to spend”, he added.

Similarly, a spokesperson for the Society of Independent Brewers (SIBA) told The MA the Government is still “finding its feet”, and the “drop feed of negative rumours” has hit the brewing and pub trade.

However, they added the Government has the opportunity to “get back on the right track” in the upcoming Budget, depending on the Chancellor’s decision on alcohol duty and business rates relief.

The society highlighted research, commissioned by SIBA, showing a 20% increase to draught relief could create more than 2,000 jobs and give a £70m boost to the economy.

The spokesperson added: “This, along with a freeze on non-draught beer, would target support at independent breweries and community pubs as well as encouraging more people to visit their local.

“It’s also vital the Government focuses on business rates reform and carries forward the hospitality relief until these vital and necessary changes are introduced.”