Tied pub tenants will get the right to a guest beer on their bar, chancellor John Healey has announced in his Budget statement. Among other measures announced, there will be an alcohol duty relief scheme for smaller brewers and cider makers,the tax threshold for small business rates relief for retail hospitality and leisure businesses will increase from £12,000 to £18,000, and the national minimum wage will rise, by 3.9%. Here’s more reaction.
“The £10m duty relief for small brewers and cider makers is positive news for the sector, but it doesn’t make a dent for an industry already under pressure from rising costs and red tape,” said Dom Metcalfe, managing director of the Great British Drinks Company.
“The government talks about creating breathing space for businesses and hospitality, but its announcement today demonstrates that there is a real lack of understanding about just how low the oxygen is for British regional brewers and the wider hospitality supply chain. It feels like another opportunity for growth and optimism has ended up in the drip tray.
“The long-term prosperity of British beer depends on a sustainable pub sector and a viable operating environment for the breweries that supply it. VAT continues to stifle the brewing and pub industry, and the government must back the campaign to cut it to 10%. Alongside business rates reform, the government should consider further targeted measures, including expanding draught relief, to support beer sales through pubs, encourage investment and protect the future of British brewing.”
Steve Alton, chief executive of the BII, said: “BII members running pubs across the UK will be hugely disappointed. This government has recognised the vital contribution pubs make in every community, but this budget does little to reduce the cumulative tax burden holding them back.
“Even the smaller increase in the national living wage means an average of £1,000 more for every full-time member of staff from April 2027. With only one in four pubs making a profit in 2026, any rise in costs is a huge challenge. With over 40p in every £1 spent in pubs going to the government in tax, many of our members are already at breaking point, understaffed, covering jobs themselves and working upwards of 80 hours a week to keep going.
“Even with a strong summer of trading, profitability is being impossibly squeezed. Our members have been consistent in what will make a real difference. They need a significant reduction in the overall tax burden they are facing, with VAT brought in line with other European countries the simplest and most impactful step. Pubs can quickly deliver investment, skilled jobs and growth in every postcode.”
Chris Jowsey, chief executive of Admiral Taverns said: “Today’s Budget delivered mixed results for pubs. Raising the small business rates relief threshold to £18,000 and confirming an additional 20% reduction in business rates is a welcome step toward supporting our licensees, but there is a lot more the government could do to support pubs in the long term and reduce the cost of doing business.
“The rise in beer duty is concerning, as is the introduction of yet more regulation for pub companies. The government had the opportunity to really champion the sector, as it has discussed, by streamlining the planning system and making it easier for publicans to invest, as well as reducing VAT payments which would ease mounting cost pressures, including mitigating the rise in minimum wages.
“Today’s announcement saw a positive first step, but there’s still no sign of the cavalry promised by Andy Burnham, and pubs continue to face onerous taxation. In the months ahead we would urge the government to continue working with the sector to ensure our vital British pubs in every constituency are given the confidence to invest in their futures.”
Miranda Richardson, licensee of The Squirrels, Duston, said: “Once again, I’m left asking what this Budget actually does for independent operators like me. I want to pay my staff well, reward my managers properly and continue investing in my pub, but every additional cost has a knock-on effect.
“We cannot keep expecting small businesses to absorb these pressures indefinitely. Pubs are employers, community hubs, and contributors to the local economy, but we need more than warm words about their importance. We need a government that makes it financially viable for us to thrive, not simply survive.”
Paul Togneri, of the Scottish Beer & Pub Association, said: “Today’s UK Budget offers very little for Scotland’s pubs. While measures to support high street businesses in England are welcome, Scottish pub operators will see little direct benefit unless the Scottish government acts to provide equivalent support north of the border.
“The increase in beer duty is particularly disappointing at a time when pubs and brewers continue to face significant cost pressures. Any further increase in the cost of a pint risks undermining investment, jobs, and growth across our sector. Scotland’s pubs remain at the heart of communities across the country, but many are still grappling with rising employment, energy, and regulatory costs. The Budget does little to address those challenges.”
He added: “The Scottish Beer & Pub Association is now calling on the Scottish government to pass on the full value of any Barnett consequentials arising from business rates support in England, and to use that funding to provide meaningful relief for Scottish pubs and hospitality businesses. There is no justification for Scottish firms being placed at a competitive disadvantage to businesses elsewhere in the UK.”
Nicola Brown, partner and head of employment at Mayo Wynne Baxter, said: “Employers should note that the real impact of national minimum wage increases will extend beyond the employees currently paid at the minimum level. Maintaining sensible differentials between grades may create additional pressure across the wider pay structure, so I recommend employers start planning now. That means auditing pay rates, checking age and apprenticeship records, reviewing salary sacrifice arrangements and other deductions, and ensuring payroll systems are ready.
“Employers should also budget for the knock-on effect on overtime, pensions, and employer National Insurance contributions. Labour-intensive sectors, such as care, hospitality, retail, and leisure, are the ones likely to feel the greatest pressure. It is also worth noting that applying the same 3.9% increase to all the rates does nothing to narrow the gap between the national living wage and the younger rates, despite the government’s stated ambition to align them.”
