The pub industry has warned Labour they face a ‘ticking timebomb’ if they are not adequately supported in the budget with bosses fearing a rise in national insurance and the minimum wage could see thousands of venue shuttered.
Since Covid, pubs have benefitted from business rates relief allowing them to claim 75% off their rates bills up to a maximum of £110,000 a year however this system is due to expire in April 2025.
Some publicans have claimed that should the help be scrapped they could be facing new bills of £24,000 a year with industry chiefs warning the wider impact could cost the sector £235million a year.
In her first budget tomorrow, chancellor Rachel Reeves is expected to announce a 6% rise in the minimum wage – something pub bosses warn could be catastrophic if beer duty is not also slashed by 5%.
Speaking to BBC Radio 4’s Today programme, Greene King’s CEO Nick Mackenzie warned that the rise was ‘higher than the industry was expecting’ and begged the government to ensure costs don’t rise cumulatively.
The pub industry has warned Labour they face a ticking timebomb if they are not adequately supported in the budget
In her first budget tomorrow the government is expected to announce a 6% rise in the minimum wage – something pub bosses warn could be catastrophic
Since Covid, pubs have benefitted from business rates relief allowing them to claim 75% off their rates bills (A closed pub during Covid)
He said: ‘It’s slightly higher than we were envisioning and its one of the costs that’s been trailed.
‘This budget is an opportunity for the government to support the pub and brewing sector which supports a 1million jobs and gives £13billion of tax revenue to the exchequer. Obviously, there are some cost increases coming through that are hitting our industry.
‘Our costs have increased significantly since 2019. The opportunity the government has here is to support the industry to grow and create jobs.
‘Our pubs are in all of our communities. We don’t want to see costs rise cumulatively. It’s really important we get support around business rates and freezing duty on beer.
‘We’re constantly looking at how consumers are feeling. The last few months have been a bit subdued on trading.
‘We’re hopeful the budget will allow people to have some certainty. Anything that can go back into the pockets of people is a positive but the rise in national insurance and minimum wage is a big impact on our industry.’
Drinks giant Diageo said unless the government cuts back the 10.1% increase in spirits duty made at the last budget over 9000 pubs could be forced to close
The Labour government’s first budget is crucial for the British pub industry
Meanwhile, drinks giant Diageo which operates brands like Johnnie Walker said unless the government commits to cutting back the 10.1% increase on spirits duty at the last budget over 9000 pubs could be forced to close.
Speaking to the Sun, Nuno Teles, managing director of Diageo GB said: ‘The Chancellor may feel that she has been handed Mission Impossible — ignite economic growth while managing a so-called budget black hole.
‘It’s certainly a challenge, but the spirits industry offers a solution. Working with us will support business growth and increase Treasury revenue.
‘We call on the Chancellor to reverse the economic damage caused by the duty increase last August.’
CAMRA has also described the situation for British pubs as precarious warning that a rise in beer duty by 2.1% in line with inflation would cost the sector approximately £75 million.
Emma McClarkin, BBPA CEO said: ‘The clock is ticking on this Government to uphold their pre-election promise to support our industry. Government must be clear-eyed about the staggering extra costs which will choke growth, be bad for business, and risk people’s livelihoods.
‘Our industry pours billions into the economy, forms the backbone of the UK job market and is a cornerstone of the community yet, with pubs making an average of just 12p a pint thanks to the huge cost of doing business, it is in a fragile state.
‘If the Government doesn’t act then communities, jobs, and the economy will pay the price. If Government invests in the industry, then we can continue to boost the economy, employ more people, and remain a home from home.’
A Treasury spokesperson said: ‘We’re supporting businesses like our well-loved pubs through pledges to make the business rates system fairer, cap corporation tax at 25% and to publish a corporate tax roadmap so that they have some welcome certainty to plan for the future.’
