There is only one thing on Fiona Hornsby’s mind as she readies her pubs for the busy Christmas period - and it’s not the throngs of happy revellers celebrating the festive season in the coming months.
Instead she, like many publicans across the country, is nervously looking ahead just a few days to Rachel Reeves’ Budget on Wednesday.
The chancellor will outline her financial plans next week and Britain's pubs are bracing themselves after a bruising few years where they have endured Covid lockdowns, the cost of living crisis and squeezed margins.
The number of pubs in England and Wales hit its lowest on record in 2022 and has continued to fall. More than 400 called last orders in 2024 and, according to trade body UKHospitality, two venues are now closing every day.
The hospitality industry has partially blamed successive governments for this malaise and hit out at Ms Reeves’ decision to hit employers with a rise in employer National Insurance contributions and cuts to business rate relief from 75 per cent to 40 per cent.
Similar measures to the last Budget year, or a rumoured increase to alcohol duty, would be disastrous, according to Ms Hornsby, who owns three venues in Liverpool city centre - The Denbigh Castle, The Bridewell and The Pen Factory.
She told The Independent: “We are absolutely dreading what will come next week. We are just terrified. It’s not ‘is it going to cost more?’, it’s ‘how much?’.
“You’re expecting to get all of your accounts out again, look at all your product prices again and look at where you could save anything.
“Even if you can shave pennies off, it all adds up together. You don’t want to push those prices onto the customer, we're all sympathetic because our own pockets are being squeezed.
“If you only have £10 to go out, you want at least two drinks. If you can’t get two drinks for a tenner, then it’s just wrong.”
In April this year - the same month that the last Budget’s measures were introduced - the average pint of a pint in Britain rose above £5 for the first time ever.
That was the point at which the country’s pubs fell from the precipice on which they had teetered for some time, according to James Nye, managing director of Anglian Country Inns, which runs 10 pubs across Hertfordshire and Norfolk.
The rise in National Insurance compounded existing challenges, including inflation and the level of VAT facing the sector, he said.
He told The Independent the industry has been taken “out of the flying pan into the fire on multiple occasions”, leaving pubs with less ability to employ people and nowhere to turn but to increase the price of a pint.
Mr Nye added: “You’ve got to pass the cost on. We haven’t passed all of it on, but you’ve got to pass some of it on and things become a lot more expensive.
“When customers see us putting prices up, they think we’re benefiting from it, but actually the government is taking so much tax out of that pint, it’s not getting to the bottom line.
“The bottom line is diminishing even though the top line is increasing - I think that’s the scary thing. The biggest proportion of all of that is tax.
“We are glorified tax collectors as an industry. I think for every £1 I made in profit last year, I paid around £7 or £8 to the government.”
Facing a similar situation is James Wilson, general manager of The Pheasant, a pub in the Cornwall village of St Newlyn East. He said The Pheasant has just had its busiest October on record but only had £800 profit to show for it.
He said: “We're not in a position where we want to make hundreds of thousands or millions. This is a lifestyle role that I took on because I wanted to do it.
“But the tricky part is making sure it's viable without putting myself or my family in a position where we're not making any money to survive on.”
He wants the Budget to include cuts to VAT and beer duty. Instead, Mr Wilson is predicting taxes will increase. Ms Hornsby issued a warning about what will happen if that is the case.
She said: “It’s a perfect storm - it just never ends. Nothing ever goes down. Everything you read about pubs suggests one is closing per day.
“I also read that 30 per cent of pubs are teetering and are just about opening the doors. If there are any more cost increases, the doors will just close.”
For Mr Nye, the social impact of those doors closing cannot be overestimated. He believes it represents an irreversible change to the fabric of Britain.
He said: “The Great British pub is one of our national treasures. It’s something that we’re proud of, it’s one of our institutions.
“But I’d say it’s harder now than it was going through Covid. At least in Covid we had support and we had awareness.”
“The government needs to wake up because we are the solution to some of their problems,” he continued. “We can gather tax, we can employ people, we can be great contributors back to the economy but we have to be given the opportunity to do so. It just feels like they’re strangling the golden goose.”
As such, next Wednesday is “make or break” for pubs, said Kate Nicholls, chair of UKHospitality, who believes the industry has “borne the brunt” of the last Budget.
She said: “We’ve had 13 consecutive months of falling employment and 170,000 fewer people on payroll across the UK since last year’s Budget – a shocking indictment of the damage caused by those measures.
Ms Nichols believes the industry is being “taxed out” and has called for urgent action - lowering business rates, cutting VAT, and addressing National Insurance contributions - to save the nation’s watering holes.
She added: "Anything less risks more closures, higher prices for consumers, and the loss of the vibrant hospitality that defines our communities and our capital. Hospitality is ready to drive growth and recovery, but we need the backing and support to do so.”
A government spokesperson said: “Pubs are vital to local communities, that's why we’re cutting the cost of licensing, lowering their business rates and helping more hospitality businesses offer pavement drinks and al fresco dining, on top of cutting alcohol duty on draught pints and capping Corporation Tax.”
