Sector’s hopes snuffed out as Chancellor fails to understand pub reality

By Ed Bedington

- Last updated on GMT

Missed opportunity for pubs in Budget

Related tags Vat Government Tax Budget Duty Pub & bar

It was a faint hope, but still cruelly dashed as the chancellor stood at the dispatch box and showed his fundamental lack of understanding of the pub sector.

A VAT cut, temporary or otherwise, was always a bit of a distant dream, but hope appeared to be flickering within trade association circles, and a cohort of Conservative MPs seemed to be backing the idea, fanning the flames for desperate operators.

Sadly it was not to be, but the big frustration for any operator in the sector is the ongoing insistence that any action on alcohol duty is some kind of big support for pubs. It isn't, and this has been clearly communicated time and time again.

In the last budget, the Government tried to claim its duty reforms would mean cheaper beer in pubs. It didn’t deliver that, in fact prices went up.

So the idea that a freeze is going to be some kind of lifeline for a sector that is continuously under the hammer is not just a joke but is disingenuous and a kick in the teeth.

Absolute nonsense

No one disputes that a freeze is better than a rise, but to claim it's of any benefit to pubs is an absolute nonsense, and will only create more friction between desperate operators who will be forced to raise prices and consumers expecting the exact opposite due to Government spin.

Politicians need to stop using the concept of “the pub” as some kind of shorthand to appeal to voters. A duty freeze will primarily benefit brewing businesses - particularly the international ones - and mean nothing on the bar.

This budget was a real opportunity for the Chancellor to demonstrate true support to the sector, with meaningful reform on business rates and a reduction of any kind in VAT, which would have given breathing room, restored confidence and allowed investment into the sector.

He stood there and talked about lowering taxes, and allowing people to be able to keep more of the money that they have earnt through their own hard work. Unless you run a pub of course, in which case, you can whistle for it.

One in three pounds spent in a pub goes to the exchequer and with costs escalating all the time, the challenge to make ends meets will only grow for operators.

Taken kicking after kicking

The next cliff-edge is also of the same Government’s making, a significant hike in the National Living Wage which will add thousands to millions to businesses costs. And what will be the only response now available to operators? Increased prices.

But don’t worry, the Government is on top of inflation (unless they can see an easy way to try and grab some votes).

But, what’s done is done - we knew there was likely to be little to no support forthcoming from a Government in its death throes. Now the real hard work kicks in.

This is a sector that is resilient - it’s taken kicking after kicking and each time it gets up, dusts itself off and goes again.

So, we go again.

Good luck to you all out there as the screws tighten, but we’ll be with you every step of the way and if I was a betting man, I’m pretty sure I know who’ll still be standing between our sector and this Government this time next year.

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