Last month the Chancellor announced an increase to Employer National Insurance Contributions (ENIC) and the National Living Wage (NLW) alongside a reduction in business rates relief as part of the fiscal address.
The measures will impact the sector “significantly” when they come into force, Clarke stated.
He said: “Small and medium sized enterprises are the real hub of our economy and we need to support them.
“But the percentage increases are significant. It’s going to affect smaller businesses and is a worry for pubs.
“Sadly, I think there will be some blood on the carpet after [the Budget].”
Huge jump
Chancellor Rachel Reeves also announced tax on draught products in pubs would be reduced as part of the Budget, claiming this would mean a penny off the cost of a pint.
However, Clarke said this was not “helpful” considering the increased cost of wages and ENIC.
“We’ve done some sums on the ENIC and NLW increases and it’s not pretty. The Budget was not friendly to businesses at all.
“If prices go up by 21p per pint, then we’ll net that back to 20p so customers will get the 1p, but prices are going to have to go up to cover the ENIC and NLW increase.
“I don’t have any principle against [increased NLW], but it will be a huge jump.
“Most businesses will have a pot for annual pay reviews, as we do, but a large chunk of our pot will be taken up by the NLW, probably at some expense”, the managing director continued.
“Don’t lose sight of what you’re trying to achieve, stick with it and look at the whole picture”
Clarke added the Government was sending out “mixed messages” when it comes to taxes and cost increases.
He said: “They say they’re not going to tax employers more, but we’re going be paying more for everything.
“There’s been so many new MP’s and civil servants out there running the show and I just don’t know what the next two or three years are going to have in store.
“We will still be here in spite of that, but more support is needed for small and medium sized businesses because they really are the powerhouse of the economy.”
On top of the measures announced in the Budget, the sector is also continuing to battle rising inflation and energy prices alongside flat footfall as consumers continue to feel the pinch amid the cost-of-living crisis.
Stick with it
Though despite the challenging economic outlook, Clarke urged operators to support each other and not to “lost sight” of their goals.
He said: “Don’t lose sight of what you’re trying to achieve, stick with it and look at the whole picture.
“Don’t lose face, talk to other people. The brewing industry is very friendly. Although we are in competition, we do all talk to each other.
“If you have a problem, someone else would have had that problem before and there are people that can help.
“At the end of the day, we’re selling fun as well as beer, so we’ve got to try and keep that up as well as standards in the on trade.”
