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Reaction to the Budget from the beer and pubs sector

Reaction has come in quickly from the beer and pubs sector for today’s Budget. 

Highlights from the Budget to help deal with the Coronavirus emergency are: 

  • Business rates suspended for one year for small businesses in hospitality
  • Business interruption loan scheme of up to £1.2m to support SMEs
  • 14 days statutory sick pay refunded for businesses with fewer than 250 employees – 14 days statutory sick pay covered
  • Abolition of business rates for one year for small businesses (rateable value under £51k)
  • £3,000 benefit to all businesses eligible for SBRR or rural rates relief
  • Alcohol duties have also been frozen and the business rates system review is to be completed by Autumn Budget, with the pubs discount raised to £5,000

UKHospitality Chief Executive, Kate Nicholls, has reacted to the details of today’s Budget Statement “Hospitality businesses are on the front line of coronavirus impacts and need support as footfall and bookings drop and people self-isolate, and as serious cashflow problems arise.

“While easing business rates burdens and partial refunding of statutory sick pay will help support some businesses but while the measures announced today may give smaller hospitality businesses some breathing room, it’s vital to recognise larger operators, and the huge number they support, but which have today been utterly ignored at a time of business crisis.

“The perverse nature of the current system is underlined by the ongoing coronavirus situation, with punishing payments still expected of companies whose venues may not be able to open or operate.”

Steven Alton, BII COO commented “We are extremely pleased that in these turbulent times, government is taking the radical step of abolishing business rates for pubs with a rateable value of less than £51k for the next year.

 Pubs are at the core of high streets and rural communities alike and the challenges they currently face are unprecedented. This relief, coupled with the  sick pay support for those self-isolating in the midst of Coronavirus, is great news for those working in the frontline of hospitality.

In addition, the news that business rates will be reviewed this year gives us hope that measures bringing short term relief will be backed up by rate reforms that could bring long term growth to our vibrant and vital sector. “

Emma McClarkin, Chief Executive of the British Beer & Pub Association, commented: “Pub goers across the UK will be toasting the Chancellor tonight for freezing beer duty. This freeze alone will save pub goers £80 million and secure 2,000 vital jobs across the country.

“82% of the beer we drink here is brewed in the UK, so this is a very welcome decision that will help pubs and brewers across the UK. Cheers to the Chancellor!

“At the beginning of the year we welcomed the Government’s decision to cut business rates for the UK’s smallest pubs by £1,000. It is great to see the Chancellor listen to our calls to take this one step further by increasing the relief to £5,000 for pubs with a rateable value up to £100,000.    

“The announcement that pubs with a Rateable Value of £51,000 or less will not pay their rates over the next financial year is an enormous boost. For pubs who already pay little or no business rates, a £3,000 small business relief grant is available, which 14,000 pubs could benefit from.  

“In total the additional business rates support announced for pubs is worth over £190 million.   

“Pubs pay 2.8% of rates despite accounting for only 0.5% of rateable turnover across the country. Such reliefs are vital until the fundamentally unfair system is overhauled. We therefore welcome the call for evidence on business rates reform announced today, commencing in the spring.  

“Following the extensive review into Small Brewer’s Relief, we welcome confirmation that the Government will publish its results in the spring. We hope the Government’s response will recognise the long-standing distortions caused by the current structure, whilst supporting growth among brewers of all sizes.  

“Overall, this has been a great Budget for pubs, pub goers and Britain’s world-class brewing industry worth £270 million. We hope the Government continues to support our industry in the future, recognising the vital role it plays in our communities and lives across the UK.”

James Calder, SIBA Chief Executive said: “The UK’s pubs and small brewers are likely to be some of the hardest hit by Coronavirus. So we are massively relieved to see the package of measures announced by the Chancellor to support us today.”

“With a freeze in beer duty, the government has shown it is backing Britain’s independent brewers, pubs and drinkers. Independent craft breweries are at the heart of our communities, creating local jobs and supporting the economy. They’ll be plenty of raised glasses toasting the Chancellor’s decision this week in our towns and cities and in Liverpool where the UK’s brewers are gathered together this week for our conference, BeerX.” 

He went on to say: “Increasing pub rates discount from £1k to £5k, and abolishing business rates for all small businesses below a rateable value of £51k will make a huge impact for our sector. Freezing fuel duty, coupled with a global drop in oil prices will also mean making those deliveries in the brewery van remain affordable.”

Commenting on the confirmation that the long awaited Small Breweries Relief Review will be announced in Spring, James said: “The results of the long awaited SBR review will be announced later in the year, with a wholesale review of all alcohol duties in the Summer. Small brewers need certainty so they can plan for the year ahead. We need positive reform of SBR, much like we’ve had positive support today to allow that to happen.”

CAMRA Chairman Nik Antona said: “Against the backdrop of industry fears on Coronavirus, it is good to see the Government has continued to recognise the value of pubs to the economy and society by freezing beer duty in the Budget. Brewers and pubs companies must now pass any savings on to consumers.  

“We feel the decision not to implement a preferential rate of beer duty is a missed opportunity and will use the upcoming review of alcohol duty to continue to make the case for this, as we believe this is the best way to support community pubs. 

“The abolition of business rates for pubs with a rateable value under £51,000, and the £5000 discount for those with a value up to £100,000 is great news for qualifying pubs, and we are glad that the Treasury has listened to our calls for action.   

“The announcement of a review of the business rates system is welcome, and this must happen as soon as possible so that we can fix the root issues with this unfair system and save our pubs from extinction.”