Rachel Reeves’ budget has left the Campaign for Real Ale, CAMRA, disheartened and warning of the further decline of pubs.
Among other things, Reeves’ tax hikes took aim at the cost of alcoholic drinks, in a move that is likely to drive up the cost of going out. In her Budget speech today, the Chancellor announced that alcohol duty would rise in line with inflation, with the Treasury confirming that the duty would increase 3.66 per cent, in line with the Retail Price Inflation (RPI).
“We are bitterly disappointed that alcohol duty has been hiked today. Instead of delivering a substantial cut in tax breweries pay on their beer going to be sold in pubs, the Chancellor has made the damaging choice to hike alcohol duties, including on draught beer and cider,” said CAMRA chairman Ash Corbett-Collins. “This extra hike in taxes on drinking in the pub can only risk more pubs and breweries being lost to the communities they serve.”
The move was described by the Night Time Industries Association chief executive Michael Kill as: “a hammer blow to an already fragile night-time economy.”
But it is the changes Reeves hasn’t made which have attracted the most ire. Corbett-Collins said of the broader Budget: “This is a dark day for UK drinkers, pubs and breweries. Instead of offering a bold package to save and support the UK's pubs, the Chancellor has chosen not to help with VAT, energy bills or employer National Insurance contributions. Pubs and breweries can contribute to economic growth but only with proper support from the Government on sky-high costs which are making it impossible for many pubs to survive and thrive.”
He added: “The decision to introduce permanently lower business rates for hospitality businesses in England from next May is a positive step and is long overdue. The Treasury has stated that all retail, leisure and hospitality businesses will pay lower rates bills than they do at the moment, even with the 40 per cent discount on business rates bills ending next year. This is encouraging, but pubs will want to know just how much they will be paying to be able to plan and to know how much this decision will help them at a time when other costs continue to rise.”
Elsewhere, James Robson, the restaurateur behind Fallow, Fowl and Roe told the Standard: “The majority of our industry is in a rapidly tightening chokehold with no short or medium sign of release.
“As a result we are fully focused on protecting the three great teams and restaurants in place. Therefore, any form of UK expansion or job creation is out as too risky.
“The tax burden is the highest I have ever known for UK business & entrepreneurs. The risk reward is simply evaporating, budget on budget. The message is clear that if you work hard and save hard we will tax you as heavily as we can whilst working, when retired and even when dead.”
“I think there’s going to be, certainly in the mid-market space, a lot of pain coming in the next eight to twelve months,” said Markus Thesleff, whose restaurant stable includes Sale e Pepe and Los Mochis. “The reality is, the wealthy will continue to be able to spend, the poor will get poorer, there’s a division happening. The middle class will continue to get squeezed.
“I think it will come down to value, and what the perception of value is. In the UK, value has traditionally been about price, but whether you’re paying £100 for a meal or £10 for a bucket of chicken, value is everything.”
Reeves drank water during her speech, though Chancellors are permitted to enjoy an alcoholic drink at the despatch box while delivering the Budget. Ken Clarke would have Scotch; Benjamin Disraeli a brandy with water; William Ewart Gladstone the unusual combination of sherry with an egg.
