However, there is much to welcome in the Budget. Three cuts and one freeze still means that beer duty is 17 per cent lower than it would have been, had the damaging policy of the beer duty escalator been allowed to continue. Pub pints are around 20 pence cheaper that they would have been as a result.
Whilst we had campaigned for a cut and not a freeze, a one penny rise was in the Government’s plans, and wine did not escape an increase. It was great to see the Budget ‘red book’ specifically mention the BBPA, in highlighting that previous duty cuts had helped support both pubs and 19,000 jobs.
It goes to show that our strong case for fairer taxes for beer still resonate strongly with the Chancellor.
Welcome changes to commercial stamp duty should reduce the cost of buying and selling pubs, but when it comes to other tax policies, the business rates changes coming in from April 2017 are the main highlight, and a significant boost for our sector. There have been two major changes. The threshold at which the small business multiplier is set for England has increased from a rateable value of £18,000 (£25,500 in London) to £51,000. This will significantly benefit pubs.
The other major change concerns Small Business Rate Relief (SBRR). Currently, this applies to all properties with an RV of £12,000 and below, with pubs with an RV of £6,00 paying no rates at all. In Budget 2016, it was announced that SBRR will be extended permanently, to allow 100 per cent relief to all properties with an RV of £12,000 or less and a taper from £12,000 to £15,000.
In total, the measures are predicted to create a saving of over £39 million for English pubs, with 81 per cent of pubs benefiting from either a small business multiplier or Small Business Rate Relief, or both, making them permanently better off by an average of over £1,100 per year. Over 16,000 pubs will pay no business rates at all – some 40 per cent of the total. The changes will particularly benefit traditional community pubs and reflect much of what BBPA called for in our response to the recent government review.
All of that said, there are concerns about measures that have been announced that could hit pubs in the future. The Climate Change Levy, will be increased from 2019, by 53 per cent for electricity and 76 per cent for gas. This will see tax increases for those not covered by the current carbon reduction commitment, such as the vast majority of pubs. The BBPA will be working with DECC to identify measures to reduce this impact - on 5th May, we will be hosting our own Pub Industry Energy Symposium to help pub businesses address these issues.
Overall we have seen some positive changes after a very energetic campaign. However, more action is needed. In Britain, we are still paying the second highest beer duty in the whole of Europe, with a rate that is well over three times the EU average.
Furthermore, pubs are now facing rises in costs from the national living wage, the apprenticeship levy and auto enrolment pensions. Whilst positive measures in themselves, they certainly strengthen the case for targeted help for our sector in the future.
Finally, I want to thank all our members, and everyone else who contributed to what was, all things considered, another positive result for our industry.