What happened there? Did we miss something? No, apprently not. No mention of VAT in respect of hospitality in the chancellor’s Spring Statement.
Okay, it’s not all bad news. There are business rates cuts to come. But the sector really needs VAT to stay at 12.5% for longer. It’s nowhere near recovery, and now has energy price increases, staff shortages, and soaring inflation to cope with, too.
On Twitter, the Campaign for Pubs has described Sunak’s statement as “disappointing” (surely the understatement of the day). It said he was “ignoring the plight pubs and publicans are in, facing utterly unaffordable energy bills, rising costs, and reduced consumer spending”.
UKHospitality chief executive, Kate Nicholls, tweeted: “Increasing VAT on hospitality to 20% while energy and food bills are at record highs will see today’s inflation figures soar and is a huge missed opportunity to ease those pressures across the economy and accelerate growth and recovery.”
The chancellor can’t say he hasn’t heard the message from hospitality. Every organisation has lobbied him. The British Beer and Pub Association has pointed out that more than 800 pubs have closed their doors permanently since the start of Covid. Now, surely, that number will build. A cut in business rates is no use if you have no business left.
‘A vital part of community life’
Tom Stainer, chief executive of the Campaign for Real Ale (CAMRA), said: “With the Office for Budget Responsibility stating that household disposable incomes are set to fall at the biggest ever rate since records began, it looks like we are in for a huge dent in consumer spending, which will hit our pubs, social clubs, and the breweries that serve them.
“Coupled with huge rises in costs for businesses in the beer and pubs industry, we urgently needed action to support and save our locals which are a vital part of community life up and down the country.
“Unfortunately, the chancellor’s announcement contained little new support for pubs and brewers. This will result in costs going up for consumers, who don’t have the disposable income with current prices, let alone in a few months’ time.”
He added: “CAMRA will continue to campaign for urgent help for pubs, breweries, and cider producers in the months and years to come. This should include more help with the burden of business rates, replacing the unfair business rates system entirely, reversing the impending increase in the VAT rate for some goods and services, and bringing forward the introduction of the draught duty rate for beer and cider served in pubs.”
» Read more: Chancellor ‘asleep at the wheel’ says Campaign for Pubs
» Read more: Chancellor has dealt a blow to tourism as well as pubs
» Read more: Struggling brewing businesses facing closure, says SIBA
» Read more: BBPA disappointed that lower VAT rate will not be extended
