Budget 2020

Pubs win in Budget 2020 with significant financial support

By Nicholas Robinson contact

- Last updated on GMT

Prepared: the Government outlines measures for coronavirus preparation in its Budget
Prepared: the Government outlines measures for coronavirus preparation in its Budget

Related tags: Chancellor of the exchequer

Teetotal Chancellor of the Exchequer Rishi Sunak paid critical attention to the pub trade in the release of his 2020 Budget today (11 March), as the sector braces itself for a hammering by coronavirus.

Pledges to support pubs and many other small businesses, as well as their employees, were made by Sunak in the Budget in a bid to protect the economy as the coronavirus increases its presence in the UK.

Many commentators highlighted that the Chancellor’s speech outlined fears the UK’s economy could be hit hard by measures put in place to protect against the virus that has swept across much of the world.

Long Live the Local

Long Live The Local​ has welcomed the freeze in beer duty announced in the Budget, as well as the increased support in business rates relief for small pubs.

The UK pays £3.5bn in beer duty each year, which is the highest across Europe. The Chancellor’s decision to freeze beer duty puts pubs and brewers in a better position than the beer duty increase originally planned.

The announcement by the Chancellor clearly demonstrates that he has listened to 250,000 people who signed the petition, 130,000 people who wrote to their MPs and 25,000 pubs who have campaigned throughout the year.

Long Live The Local​ programme director David Cunningham commented: “The Government has listened to the quarter of a million people that signed our petition asking for a cut to beer duty. While not a cut, replacing the planned increase with a freeze shows the Chancellor has recognised the value of local pubs and Britain’s brewers.”

This was echoed by Candice Brown, publican of the Green Man in Eversholt, Buckinghamshire, and former Great British Bake Off​ winner. She said: “Pubs are the beating heart of villages like Eversholt. There are pubs like mine up and down the country that will welcome this freeze in beer duty. It’s great to see the Chancellor really understands the cultural, social and economic value of pubs. He would be welcome for a pint in my pub any time.”

However, it was made clear that pubs and their employees would be protected as much as possible during and after any issues caused by the outbreak through a series of measures, as reported live by The Morning Advertiser​.

Imminent coronavirus threat

Firstly, Sunak outlined the imminent threat the virus poses to UK citizens and its economy, saying: “We are doing everything we can to keep this country and our people healthy and financially secure.

“We will get through this together. The British people may be worried but they are not daunted. We will protect our country and people, and will rise to the challenge. This virus is the key challenge facing our country but it is not our key challenge.

“We have just had an election where people voted for change to our economy and this Budget delivers on that change.”

He said there could be up to a fifth of the population out of work with the illness or in isolation, impacting their income and that of their employers.

As a result, Sunak abolished business rates for pubs with a rateable value under £51,000 for the financial year, as well as an additional business rates relief of £5,000.

Coronavirus interruption loan

Employers will also be able to claim a temporary coronavirus interruption loan, while businesses with fewer than 250 employees will be able to refund statutory sick pay for those off work due to coronavirus for up to 14 days.

Self-employed and gig-economy workers (zero-hours contractors) will also be given access to the relevant sickness benefits immediately, should the virus prevent them from working.

Sunak also confirmed a digital services tax will be introduced from 1 April, seeing a 2% levy on sales from certain types of digital businesses, which could raise £500m a year.

Meanwhile, plans to increase beer, wine, spirits and cider duty were also axed by the Chancellor, who hailed the pub trade as vital to the communities they serve.

Such a move inspired joy and relief from producers and the trade bodies representing them.

Wine and Spirits Trade Association (WSTA) chief executive Miles Beale​ said: “The decision to freeze wine and spirit duty is welcome for British business, pubs and the wider hospitality trade. While he has not cut duty, it is reassuring to see that in his first Budget as Chancellor, Rishi Sunak MP, has taken steps to address the UK’s excessively high duty rates.

“Today’s freeze is a victory for the WSTA’s hard-fought campaign that called on Government to help cash-strapped consumers by keeping prices down, and to support British businesses entering a new trading landscape.”

The UK Spirits Alliance (UKSA)​ paid a similar tribute to the Budget and a spokesperson said: “Today’s announcement of a freeze in spirits duty is welcome news for Britain’s army of distillers and the millions who enjoy our products. This is the third freeze in three years, bringing much-needed stability for our industry.

“We also welcome confirmation of the Government’s Queen’s Speech commitment to a review of alcohol duties.”

A Heineken UK ​spokesperson said: "Licensees and drinkers up and down the UK will be raising a pint to the Chancellor tonight for freezing beer and cider duty – supporting the great British institution, the pub.

“Furthermore, the newly announced increase in the business rates discount for pubs from £1,000 to £5,000 will help secure a brighter future for thousands of pubs – pubs that are at the heart of communities across the nation.”

Nik Antona, Campaign for Real Ale ​chairman, said: “Against the backdrop of industry fears on coronavirus, it is good to see the Government has continued to recognise the value of pubs to the economy and society by freezing beer duty in the Budget. Brewers and pubs companies must now pass any savings on to consumers.

“We feel the decision not to implement a preferential rate of beer duty is a missed opportunity and will use the upcoming review of alcohol duty to continue to make the case for this, as we believe this is the best way to support community pubs.

“The abolition of business rates for pubs with a rateable value under £51,000, and the £5,000 discount for those with a value up to £100,000 is great news for qualifying pubs, and we are glad that the Treasury has listened to our calls for action.

“The announcement of a review of the business rates system is welcome, and this must happen as soon as possible so that we can fix the root issues with this unfair system and save our pubs from extinction.”

Diageo ​Great Britain, Ireland & France managing director Dayalan Nayager said:“We welcome the Chancellor’s duty freeze, which will provide much needed stability in these difficult times for the industry. We are delighted that he announced his intention to reform the duty system to bring fairness for gin and Scotch whisky, which should ensure that these iconic home-grown products no longer face punitive levels of tax.

“Drinkers across the country will raise a toast to the Chancellor tonight. The Government’s measures to help the hospitality and retail sectors will also be a welcome move for our customers, their employees and consumers in general.”

British Institute of Innkeeping ​COO Steven Alton commented: “We are extremely pleased that in these turbulent times, the Government is taking the radical step of abolishing business rates for pubs with a rateable value of less than £51,000 for the next year.

“Pubs are at the core of high streets and rural communities alike, and the challenges they currently face, are unprecedented. This relief, coupled with the sick pay support for those self-isolating during Coronavirus, is great news for those working in the front line of hospitality.”

In addition, the news that business rates will be reviewed this year gives us hope that measures bringing short-term relief will be backed up by rate reforms that could bring long-term growth to our vibrant and vital sector.”

Vice-president for Carlsberg​’s corporate affairs Bruce Ray said: “Beer and pubs make a significant contribution to the UK economy and play an important role in the lives of many people who enjoy drinking beer in the many wonderful pubs and bars all across the country.

“We’re pleased the Chancellor has recognised the public’s concern and has frozen beer tax. This is good news for breweries of all sizes, their supply chains and employees, as well as the thousands of hard-working publicans all across the UK.”

Emma McClarkin, chief executive of the British Beer and Pub Association​, said: “Pubgoers across the UK will be toasting the Chancellor tonight for freezing beer duty. This freeze alone will save pubgoers £80m and secure 2,000 vital jobs across the country.

“Some 82% of the beer we drink here is brewed in the UK, so this is a very welcome decision that will help pubs and brewers across the UK. Cheers to the Chancellor.”

Related news

Follow us

Pub Trade Guides

View more

FREE EMAIL NEWSLETTER

Subscribe to The Morning Advertiser

The definitive voice for the pub trade

Get the latest news, analysis and insights from the uk pub sector straight to your inbox!

Featured Events

View more

Listen to The MA Podcast