The BII is encouraged that the Chancellor has yet again recognised the importance of pubs and the communities that they support in today’s budget. The announcement that business rates for 2022/23 are to be reduced by 50% for hospitality businesses is hugely welcomed.
The BII has consistently asked for 3 key support measures for our nations’ pubs; full reform of the business rates system as well as a further reduction to support pubs in the short term; a more permanent reduction in VAT for our sector, to reflect the challenging trading conditions over the last 18 months, and a reduction in taxes for draught products served in pubs. We equally welcome the immediate cancellation of the duty increase on alcohol, and the 5% reduction in duty on draught products served in our pubs and will continue to work closely with Government on the detail of how this will be delivered.
Steven Alton, BII CEO commented: “We are encouraged that the Chancellor has yet again referenced the importance of pubs in their communities and specifically as safe spaces for people to enjoy alcohol responsibly. This has been reflected in the business rate reduction for next year and the specific cut in duty for draught products served in our pubs.
“Our members have consistently shown throughout this crisis, their commitment to their local communities, and their ability to keep customers and staff safe. Whilst the measures announced are positive steps, pubs continue to face huge challenges across all areas of their business, in staffing, supply chain, deliveries and debt. Trading for their businesses remains difficult amidst the speculation in the media around Plan B, which continues to affect consumer confidence, at a time where they need to be trading at much higher levels than in 2019, just to break even.
“Ongoing support will be needed both in the form of a fundamental reform of business rates to rebalance this unfair burden on our pub businesses with the online economy, and a long term reduced VAT rate to support our members’ recovery over the coming years. This investment in our nations’ pubs will ensure that they can play their full part in our collective economic recovery.
“We will continue to work closely with Government ensuring that we do all we can to safeguard the future of our nations’ pubs at the heart of our communities.”
Responding to the Chancellor’s Budget, Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: “Pubs, brewers and beer drinkers will be toasting the Chancellor today for a range of business-boosting measures.
“Pubs pay 2.5% of Business Rates despite accounting for only 0.5% of rateable turnover – an overpayment of £570m. Cancelling the rates multiplier and cutting rates for pubs by 50% for one year is a much-needed boost to our sector in its fragile recovery.
“The 50% cut to business rates alone will save pubs £169 million. However, the cap of £110,000 per business is a huge dampener and means a significant number of pubs will not benefit from the relief at all.
“The multiplier freeze will save English pubs £32 million.
“The announcement that business rates revaluations will happen more frequently is also welcome, as is the one year improvement allowance. However, we remain concerned that for the longer term the inherent unfairness of the business rates system for pubs has not been addressed.
“The Chancellor’s decision to freeze beer duty instead of the RPI linked increase he had planned is to be warmly welcomed. It will save £177 million and secure 9,000 vital jobs across the country. Clearly, the Chancellor listened to the 134,000 people who signed the Long Live The Local petition calling on him to support pubs and brewers in the Budget.
“Pub goers will also be toasting the Chancellor today for announcing a 5% lower duty rate on draught beer worth £62 million. This is great news for our local pubs and recognises the crucial role they play in our economy and society. However, the overall beer duty rate in the UK remains amongst the highest in Europe. It is vital for Britain’s brewers, a world class homegrown manufacturing success story, that the overall beer duty burden is reduced – not just duty on draught beer in pubs.
“Beer is a low-strength product and breweries have invested heavily in developing a range of innovative, exciting and great tasting low and no alcohol beers. We therefore welcome proposals to reduce duty on lower-strength products as part of the proposed modernisation of the alcohol duty regime to better incentivise the consumption of lower-strength drinks.
“Overall, this has been a good Budget for pubs as they recover from the pandemic. The measures announced today will help pubs and breweries play a leading role in levelling up the economy and building stronger, more vibrant communities throughout the country.”
Responding to the Chancellor’s Budget, UKHospitality’s Chief Executive, Kate Nicholls said: “We have been lobbying hard for significant reform of the outdated business rates system and therefore very much welcome the Chancellor’s move today to extend the 50% business rates relief for the hospitality and leisure sector for the next financial year. The devil will be in the detail, though, so we look forward to learning to what extent it will benefit businesses.
“The Chancellor’s announcements simplifying – and in many cases reducing – alcohol duties, are great news for pubs, bars and restaurants, and will benefit all. The Chancellor has shown real innovation and creativity in reforming an archaic system of duty, which we applaud.
“Positive as these announcements are, hospitality remains incredibly fragile, facing myriad critical issues. Rising utility bills, wage bills and food and drink prices have resulted in 13% inflationary costs that businesses are having to absorb at the same time as they navigate severe supply chain issues and chronic staff shortages. Given this toxic cocktail, it is imperative the Government go further to support businesses in our sector.
“The most effective way to achieve this would be to maintain the current lower 12.5% of VAT for the sector. The Chancellor has been bold and radical with alcohol duty – we urge him to adopt the same approach when implementing root and branch reform of business rates, to ensure industries share the burden equally.
“Hospitality has shown this summer that it has the potential to kickstart the nation’s recovery and deliver jobs, growth and investment at pace across all parts of the country but that could grind to a halt next year. It can only lead recovery with the right measures of support in place.”
Responding to the Budget, James Calder, SIBA Chief Executive said; “The Chancellor’s Budget introduced radical changes to the outdated Alcohol Duty system which will benefit brewers of lower strength beers, traditional cask beer and create a more level playing field between small breweries and cider producers.
The lower rate of duty for beer sold in pubs is a huge win for the industry and something which SIBA has been campaigning for. We look forward to working with the Treasury as they implement this landmark policy. Whilst hugely beneficial for producers of Real Ale, which is sold in forty litre casks, most craft keg beer in the UK is sold in thirty litre kegs, meaning they cannot benefit. By amending this lower threshold to twenty litres the Treasury can ensure all independent breweries benefit from this welcome new duty relief on draught beer.
Furthermore the Freeze in Beer duty, taking effect from tonight, is very helpful at a time when brewers are seeing a myriad of other supply and running costs rising, and the Business Rates Relief for pubs will be welcomed by many in a struggling sector.
The new Small Producer Relief scheme builds on the hugely successful Small Breweries Relief scheme (SBR) and we will continue to work constructively with The Treasury to implement positive reform of SBR that does not see small independent breweries worse off.
Cutting business rates bills for hospitality premises by 50% for the next year is also hugely beneficial and SIBA would like to see the definition of those premises expanded to cover all breweries, taprooms, bars and pubs.”