Reaction: how the sector has responded to the Budget

The chancellor Rachel Reeves has delivered her widely anticipated Autumn Budget, confirming a cut in business rates, an increase in National Minimum Wage, free apprenticeships for under-25s, rising alcohol duty and zero mention of VAT. Here's how the industry has responded:

UKHospitality
"Bricks and mortar hospitality businesses are being taxed out, and they have been penalised by the broken business rates system for far too long," says Kate Nicholls, chair of UKHospitality. "Today the chancellor recognised the importance of hospitality and provided a permanently lower multiplier for hospitality businesses – reforms secured by UKHospitality. 

"However, the 5p discount is only a quarter of the maximum 20p discount the government proposed last year. This is particularly frustrating given changes to business rates valuations will mean that many hospitality businesses’ tax bills will still significantly rise, alongside increases to the minimum wage adding extra cost. Business tax rates for hospitality must continue to fall for the rest of this parliament.

"The government has heeded our calls for significant transitional relief for businesses, which will mitigate the worst impacts of the revaluation. Hospitality remains under significant cost pressures, with the highest tax burden in the economy. We will continue to campaign for additional support for the sector, including further business rates discounts."

The BII
“Words cannot express how devastating this budget is for so many of our members," says Steve Alton, BII CEO (pictured). "We have been working closely with government, sharing the realities for our members, running vital pub businesses in every community with them.

"These measures will inevitably force many venues to reduce hours, cut investment and, most worryingly, cut jobs, with young people set to be hit the hardest. Pubs are one of the UK’s biggest employers of 18-25-year-olds, offering vital first jobs, training and career opportunities. Today’s Budget threatens these essential employment opportunities in every community.

"Government simply must reconsider their position on this or face the huge and dire consequences that we have warned of over the last year, with 35% of independent pubs under threat of closure. Without meaningful support, the consequences will be felt in lost jobs, failed businesses and weakened communities.”

Mulligans, Manchester
"There isn’t a great deal in this Budget that directly supports pubs or hospitality, but it could have been more damaging," says Pádraig Brady, owner of Mulligans. "Many operators were expecting worse.

"Labour costs are already one of the biggest issues facing pubs, so the increase in the national living wage will definitely hit some independents. At Mulligans, looking after our team has always been a priority, and we’ve consistently ensured we pay above the minimum wage; we’ll be increasing wages in line with the rise to continue supporting our staff.

"Plans to introduce permanently lower business rates in the future should benefit smaller pubs like ours, but that support won’t arrive straight away, so financial pressures will continue in the short term.”

The Silks in Marlborough
"Today's Budget from the Labour government is yet another tangible blow to the UK pub trade, an industry already struggling in this economic climate," says Thomas Frake, executive chef and publican at The Silks in Marlborough. 

"As a country pub operator, our front-of-house and kitchen staff is often comprised of part-time, younger employees - who aren't necessarily hospitality professionals - and flexible workers. The unexpected, above-inflation rise in National Minimum Wage will increase our wage bill by approximately 5% from April, and this will need to be offset by price increases, as we have no further operational headroom to reduce staff after the last Budget.

"In addition to the increase in National Minimum Wage, an insulting reduction of 1.7% on beer duty is immediately wiped out by duty increases on wine and spirits in line with inflation, and further increasing energy costs. Any profit we were forecast to make next year will be eliminated unless our prices rise."

Campaign for Pubs
"This is a deeply disappointing budget that does nothing to address the crisis facing the UK’s world famous pubs," says Greg Mulholland, campaign director for the Campaign for Pubs. "There’s some limited support for some pubs in England through business rates, but no support whatsoever for pubs in Scotland, Wales and Northern Ireland.

"Despite around 90,000 lost jobs in hospitality since last year’s disastrous Budget, the chancellor has done nothing to address those damaging cost hikes and indeed has imposed further costs on pubs and publicans who have to pay increased staff wages, at a time when many publicans are already earning less than their staff. Altogether this Budget will mean yet more job cuts in pubs and more publicans unable to make a living."

Wine and Spirit Trade Association
The government’s “typically disappointing and shortsighted decision” to increase alcohol duty by RPI will perpetuate the economy’s “doom loop”, a deflated Wine and Spirit Trade Association warned.

The new tax raid on alcohol will damage British business, lead to higher prices for consumers and a reduction in sales, which in turn drains Treasury funds. With RPI set at 3.66% duty will go up by 11p on a bottle of Prosecco, 13p on a bottle of red wine and 38p for a bottle of gin from 1 February next year. When the duty increases kick in next year wine and spirit prices will have risen by almost £1 a bottle in a year, taking into account the ongoing burden of duty rises, the new waste packaging tax and VAT.  

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