Pub operators react to Budget blows

Leaders from across the pub and bar sector have been sharing their reactions to the autumn Budget.

Although there were glimmers of positivity delivered by the chancellor Rachel Reeves, decisions on business rates and National Insurance contributions have left operators nervous about the costs to come.

Reeves announced she will continue the business rates relief from April 2025 for hospitality venues, but at a lower rate of 40%, instead of the current 75%, up to a cash cap of £110,000 per year. There will then be a full reform of the business rates system in 2026/27.

Alcohol Duty was cut by 1.7% for draught alcohol products, but duty rates on non-draught products will increase in line with RPI from February next year.

"Whilst we welcome the chancellor’s announcement to cut draught beer duty for pubs, which we repeatedly campaigned for, and provide a short extension to the small business rates relief at a lower level, we are disappointed with the lack of meaningful incentives to invest and grow," says Chris Jowsey (pictured), CEO of Admiral Taverns, which has over 1,420 pubs across the UK. "Community pubs remain massively overtaxed and with the wider alcohol duty still increasing, the cost of doing business is only rising for our publicans. 

"Today was a prime opportunity for the new government to show its support for a sector which contributes over £34bn to the UK economy each year and provides over 1m jobs. Unfortunately, the cumulative impact of these measures will cost community pubs significantly. Given we will still see business rates double for a lot of pubs, it is even more important now that the government uses the next two years to implement a proper reform of the business rates system which is fairer for pubs, an industry which is one of the most heavily taxed business sectors. This will ensure the longevity of the much-loved institution, as well as the many communities, jobs and livelihoods which rely on it."

Compounding challenges

Giles Fuchs, owner and co-managing director of Burgh Island Hotel, expressed his sympathy with those outlets not able to absorb what's coming.

"Whilst Burgh is in a good position to deal with these extra costs announced by the chancellor, many are less fortunate," he says. "An increase in National Insurance Contributions will compound the challenges faced by many hospitality businesses, particularly those already managing tight profit margins. For an industry that plays a crucial role in employment across the UK, being the third-largest employer, the NIC hike risks stifling growth at a critical time.

"The upcoming 6.7% increase in the minimum wage in April 2025 adds further financial strain, as hospitality businesses will face significantly higher payroll costs. Coupled with the end of the 75% business rates relief for retail, hospitality and leisure businesses next April, this represents an additional blow to a sector grappling with soaring operational costs. Without this relief, the sector faces a battle to maintain its role in supporting local economies and driving tourism."

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