Spring Statement ignores pubs and bars

Pubs, bars and the rest of the hospitality industry have been left frustrated following the delivery of the chancellor's Spring Statement on 26 March. 

With operators from around the UK holding on to the hope that there may be some relief to the imminent cost increases heading their way next month, the announcements from Rachel Reeves failed to mention the hospitality industry, let alone address the tax rises on the horizon.

These include the 10% increase in National Insurance Contributions (NICs) from 13.8% to 15%; the changes to the NIC threshold, meaning staff earning £5,000 a year are now in scope for employer NICs; the reduction of the business rates relief to 40%; and the rise in National Minimum Wage.

"Today’s statement was incredibly disappointing, delivering nothing to allay the fears of operators in our essential sector," says Steve Alton, CEO of the BII. "Pubs are the very fabric of our society, and despite encouraging trading for many of our members at the beginning of the year, their profitability has been threatened yet again.

"Incredibly successful operators, who serve their communities, provide flexible employment and incredible career opportunities, can be part of the growth that was at the heart of this government’s manifesto. But the current approach of taxing small businesses to the hilt, means that growth will be impossible, as operators desperately try to manage ever rising costs, being forced to cut services, opening hours and staffing levels to ensure they survive."

Alton says the BII has been "crystal clear and consistent" in its messaging to government.

"If you remove the barriers to growth, pubs will rapidly deliver revenue, local employment and support for supply chains and communities," he adds. "Without recognition of the pressure the autumn Budget put onto our sector, uniquely placed at the heart of every town, city and high street in the UK, they have failed communities everywhere."

Missed opportunity 

Trade body UKHospitality says that the lack of a clear growth plan for hospitality puts high street jobs at risk.

Following the statement, it called for the government to urgently bring forward a plan that allows hospitality to unlock growth and jobs.

"Growth won’t just happen without a plan," says Kate Nicholls, chief executive of UKHospitality. "[The] statement was yet another missed opportunity to avoid an April cliff edge which will level a devastating £3.4bn annual increase to the sector’s tax bill.

"The government’s own analysis shows the failure to address the employer NICs threshold will force businesses to freeze recruitment, reduce hours available for staff and reduce employment levels in the very sectors the government needs to achieve its goal to get people off welfare." 

Nicholls says that if the government is serious about getting Britain working, it needs hospitality.

"When we were backed after the financial crash and the pandemic, we proved how we can help drive economic recovery," she adds. "There is still time for the chancellor to act and avert this disaster. Now is the time to back hospitality, delay the changes to employer NICs and work with us to bring forward a plan for the high street that can deliver socially productive growth and opportunities to get people back into work."

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