UK pub bosses 'disappointed' by budget help for hospitality industry

Beer bosses branded measures to prop up the ailing hospitality industry “disappointing”, saying drinks-focused pubs and breweries have been left out and pressing concerns such as mounting rent bills have not been addressed.

Sector-specific policies unveiled in the budget include a six-month extension to the reduced 5% VAT rate for hospitality and leisure businesses, at a cost of £5bn to the Treasury.

The reduction from the usual 20% rate, introduced by Rishi Sunak last July, will now last until September, followed by an interim rate of 12.5% until April 2022.

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Hospitality and leisure firms can also apply for “restart” grants of up to £18,000, worth £400m to the pubs sector. A moratorium on payment of business rates will be extended until the end of June, while Sunak also confirmed that alcohol duty will be frozen for the second year running.

Trade bodies and pub bosses welcomed industry-specific measures, as well as the extension of the furlough job support scheme until September, with UK Hospitality boss Kate Nicholls calling the support “crucial”.

But leading pub industry figures pointed to a failure to tackle long-term threats including a looming crisis facing thousands of pubs facing rent demands despite long-term closure.

Greene King boss Nick Mackenzie said rules preventing landlords from throwing out tenants for non-payment of rent expire this month.

“There’s a big cliff edge for the hospitality sector on rent that hasn’t been addressed at government level,” he said.

The Campaign for Pubs said rent bills from commercial landlords and some large pub companies was “the biggest threat to [pubs’] survival”.

Dawn Hopkins, the group’s vice-chair and licensee of the Rose Inn in Norwich, also took aim at Sunak’s refusal to include alcohol sales in the VAT cut, a policy that has hit “wet-led” pubs hard.

She said the policy ignored classic community pubs and instead “funnels millions to the likes of McDonald’s and KFC who don’t need it.”

Admiral Taverns boss Chris Jowsey said the exclusion of alcohol meant that about 80% of his 1000 pubs had seen no benefit from the policy.

He also questioned the decision to restart business rates – albeit at a reduced rate – at the end of June, nine days after the earliest point at which pubs can fully reopen.

“It feels tough to be reopening and be hit with rates immediately,” he said.

“There was nothing in there about taxing the winners out of the pandemic, such as online businesses, but we’re going straight back to business rates.”

“There’s some support and I’m grateful for that but overall I’m disappointed.”

Craft beer trade body Siba criticised a lack of support for the UK’s once thriving brewery scene, which misses out on cuts to VAT, targeted grants and business rates relief.

Its chief executive, James Calder, said: “What is the point in helping hospitality if there aren’t vibrant, diverse and local beers on offer when the economy reopens?”

At the Parkers Arms in rural Lancashire, landlady Stosie Madi welcomed sector-specific support but said the VAT cut and business rates holiday should have been extended until April 2022.

“Some of us have not traded since October so to start paying VAT just as you’re going into your low trading period – when we’ve not had a chance to capitalise on spring – is a bit worrying,” she said.

Madi said restrictions on indoor custom meant the pub would not be able to open on weekdays at first, even after outdoor service is permitted to resume on 12 April.

“We’re in rural Lancashire, facing a big moor. We’ve got driving rain and UK weather conditions to deal with,” she said.

“We might have to have people run out with food under umbrellas,” she said.

One budget measure that could help neighbourhoods save struggling community pubs is a £150m fund to help them buy their local rather than risk losing it.

While trade bodies and businesses welcomed the freeze in alcohol taxes, ale enthusiasts’ group Camra called it a “missed opportunity” to cut beer duty.

The government is in the midst of a review of alcohol duty, which is higher in the UK than in most of Europe.