Like the rest of the country, the hospitality sector is on tenterhooks about the Budget at the end of the month. It’s going to be a pivotal moment for the UK economy but particularly for our sector, with many holding onto the hope of some much-needed optimism and relief.
In recent weeks, alarming speculation of legislative and fiscal changes – despite the Government’s welcomed five-point plan for pubs promoted in its election manifesto – have hit the headlines; potential increases in alcohol duty, no guarantee of sustaining the vital business rates relief, a potential smoking ban in pub gardens to name but a few.
The Budget has the potential to enable and encourage the sector to continue to play a pivotal role in what we are told is the primary objective of this Government – getting the UK economy into growth, or place further disproportionate and punitive taxation on this vibrant and dynamic sector. I’ve worked in this wonderful industry for almost 30 years, and it has never felt like such hard work to wade through ever increasing red tape and see our efforts increasingly eroded by disproportionate taxation.
The time has come for the Government to finally recognise the invaluable role pubs play in our communities and act decisively to support them. Eight out of ten people believe pubs bring people together, and three in four say their local plays an important role in battling loneliness in their community.
Not only that, but our sector supports more than a million jobs and pours billions into the UK economy every year. However, despite the huge economic and social value, ever increasing taxes and rising business costs means pubs make just 12p of profit on an average pint of beer whereas tax is almost 13 times as much at £1.52 (VAT 80p, beer duty 49p, other taxes 23p).
Our industry cannot bear more punitive Government imposed burdens – and for many licensees, it would leave no alternative than to close the doors for good on these beloved institutions, which are both an integral part of our communities and an invaluable part of our social and cultural heritage.
Our sector continues to inspire me with the innovation, creativity, entrepreneurship and resilience that I see day in day out. I don’t see another sector which has adapted and flexed more in recent years to stay profitable whilst giving people the best experiences they can, improving their offer and adapting their spaces to reflect the needs of the individual communities’ they serve. Despite the challenges, we have continued to invest in our pubs, our people and our brands, yet any success is increasingly achieved despite the regulatory and fiscal environment rather than being supported by it.
As we approach the UK Budget announcement on October 30, the hospitality sector, particularly pubs, stand at a critical juncture. This Budget can either bolster the industry by providing the conditions and incentive for continued investment and innovation or jeopardize it.
With Labour having pledged that small businesses “are not just the lifeblood of our communities but essential to our economic success”, I’m hoping our politicians will stand by the five-point plan they committed to and understand the need to support our nations brewers and pubs – but we need more than hope, we need action.
The British beer and pub sector contributes £34 billion to the economy annually, generates £18billion in tax and supports more than a million jobs. When pubs and brewers suffer, the economy and society suffer. If the Government wants to succeed in its growth mission, it needs to unleash the potential of this vital and progressive sector.
At St Austell Brewery we are focused on continued growth, harnessing the momentum we’ve built to ensure that the business evolves positively and remains fit for the future. This extends to supporting our business partners running our 120 tenanted pubs across the South West, but without some relief, the industry will suffer.
A fair and supportive approach to beer duty is essential for ensuring pubs remain accessible and economically viable. Business rates continue to weigh heavily on the shoulders of our business partners running pubs.
Having spoken to some of our business partners, I know they see this Budget as a crucial one. The word being used is ‘relentless’. Having come through a pandemic – when the public missed pubs so much – the cost-of-living crisis, energy hikes, alcohol duty increases, lower domestic tourism, labour shortages and supply chain issues – it really has been an onslaught.
We need a progressive and supportive Budget to ensure pubs can keep growing, keep employing local people, remain the cornerstones of their communities and put money back into the UK economy. To do this the industry needs to thrive, which is why the Government must reduce the cost of doing business and balance the tax burden across the economy.
A balanced approach to beer duty, a long overdue and meaningful review of the antiquated business rates system, and careful consideration of regulations like smoking bans can help secure the future of our pubs, ensuring they remain vibrant hubs for generations to come.
The beloved British pub is an institution we cannot afford to lose – and the Government can’t afford to do without pubs contributing significantly to the economy. They must also consider the public health benefits they provide to those who rely on the pub for companionship, camaraderie and connection. Pubs are welcoming shared spaces for people where friendships have been struck, communities ties formed, and special occasions remembered. The benefits of the pub in their locality can’t be underestimated or taken for granted.
I’m urging the Government to support brewing and pubs and commit to the five-point plan it outlined in its pre-election manifesto. Like the British Beer and Pub Association (BBPA), whose mission is to advocate for the concerns of UK pubs and brewers, we want to see a cut in beer duty, business rates reform, and a pledge to keep the 75% business rates relief to ensure that pubs can survive.
I urge everyone to support your local and our industry. One simple way of doing so is through the BBPA’s Long Live the Local campaign which shines a light on the issues facing our industry, allowing people to show their solidarity for the sector by signing its online petition and writing to MPs to raise awareness of the issues we face.
