Spring Budget 2021
• BUDGET LIVE: Chancellor extends furlough and business rates relief in 'make or break' Budget
- This feed is no longer being updated. For the latest industry reactions to the Budget and other coronavirus related measures, please visit The MA's live feed.
15.54 - 'Denied millions in vital relief at a critical time'
Nick Mackenzie, chief executive of Greene King, also welcomed the Budget but said it posed a number of challenges.
Mackenzie explained: “While the business rates extension will help our tenants and smaller businesses, the £2m cap from the end of June, just nine days after planned full reopening, means larger businesses will be denied millions of pounds in vital relief at a critical time. This makes it more important than ever that the government sticks to the timetable for reopening.
“The Chancellor has placed the additional grants at the heart of his package of support for pubs, but it will make little difference if we are unable to access them due to State Aid Rules. We need government to clarify this urgently, and remove the cap to ensure all businesses can benefit.”
15.32 - 'Much-needed lifeline to an industry on its knees'
Lawson Mountstevens, managing director of Star Pubs & Bars, has welcomed the support measures announced for hospitality.
He said: "Continuing the 5% VAT rate until September and further business rates relief together with the new Restart grant scheme provides a much-needed lifeline to an industry on its knees. We’ve done all that we can to help our licensees through the pandemic - investing nearly £50m in rent reductions.
"It is good to see the Chancellor step up and provide additional support for pubs who are the beating hearts of their communities the length and breadth of the UK, and we hope today’s announcement paves the way for future alcohol duty and business rates reform to help our sector longer-term.”
14.16 - Rent debt remains ‘biggest gap’ in hospitality support
Despite broadly welcoming the provisions set out in the Spring Budget, trade body UKHospitality has flagged that a ‘£2bn millstone’ still faces pub, bar and restaurant operators.
Revealing his plans to address the UK economy’s largest contraction in more than 300 years, Chancellor of the Exchequer Rishi Sunak outlined a number of measures to help pub and bar operators continue to weather the ongoing pandemic – including extensions to the 5% VAT rate, business rates holiday and alcohol duty freeze.
However, despite broadly welcoming support measures outlined by the Chancellor for ailing hospitality businesses, UKHospitality chief executive Kate Nicholls explained that the failure to address sector rent debt remained the “biggest gap in support”.
“We need the Government to announce an extension of the moratoria at the earliest opportunity and work with industry to establish a landing zone to resolve this £2bn millstone around our recovery,” she explained.
Reporting by Stuart Stone
14.02 - 'Grants do not cover basic running costs of closed pubs'
The British Institute of Innkeeping’s Steve Alton has said the Budget allows pubs to “begin to look to the future of their businesses once more.”
Although further reductions in business rates would allow pubs time to recover, until normal trade resumes, the “vast majority” will still be loss making, Alton said.
He added: “The extension of the VAT cut is welcomed, helping food businesses through the summer, however for our community wet-led pubs, the benefit will be extremely limited and they will not be able to trade profitably until all restrictions are removed.
“The news on further grants is positive, but in no way covers the basic running costs of our closed pubs or compensates them for the lost income over the last 12 months. For many of our members, these grants will not even cover the furlough contributions that will be needed to safeguard their teams until May, let alone June.”
“The support announced gives our sector an opportunity to rebuild as they reopen in line with the Government roadmap, however, any changes to their plan will need to be matched with appropriate support measures."
13.44 - 'All in all a positive budget for hospitality'
Executive chairman of Oakman Inns Peter Borg-Neal has welcomed the measures outlined in the Budget today. However, he said "concern remains" over those hit by rent debt.
All in all a positive budget for hospitality. Concern remains for those industry colleagues who are badly exposed to rent debt. We also need the VAT cut to be made permanent. #Budget2021
— Peter Borg-Neal (@PeterBorgNeal) March 3, 2021
13.32 - 'Better than expected'
UKHospitality chief executive Kate Nicholls said the Budget signalled the "first signs of a longer term plan for recovery."
Overall a +ve and much better than expected Budget - some challenges ahead with tax tightening but first signs of a longer term plan for recovery. If govt wants to deliver jobs, growth and investment at pace across UK then it needs a robust and resilient hospitality sector
— Kate Nicholls (@UKHospKate) March 3, 2021
The trade association was among many to call for a year-long extension to the business rates holiday and VAT cut.
13.22 - £150m for Community Ownership Fund
There will be a £150m fund to help communities take ownership of pubs, theatres, shops, sports clubs at risk of loss.
This policy will mean "putting more power in the hands of local people," Sunak said.
13.05 - Alcohol duty will remain frozen
Planned increases in duties for spirits, wine, cider and beer will be cancelled, the Chancellor has announced.
This will be for the second year in a row.
13.04 - Chancellor sets out 'progressive' tax plans
Chancellor Rishi Sunak said he will repair the country's finances with a fair approach. He will not raise income tax or VAT.
He will freeze personal tax thresholds.
Sunak said: "The amount we've borrowed is only comparable with the amount we borrowed during the two world wars.
"It is going to be the work of many governments, over many decades, to pay it back."
From April 2023, the rate of corporation tax on company profits will increase to 25%.
The economy will have recovered by this point but struggling businesses will not be affected by the change, Sunak said.
12.56 - National Living Wage to rise
The National Living Wage will rise by 19p to £8.91 from April.
It is £8.72 an hour at present and will increase by 2.2%
The new rate will also apply to 23 and 24-year-olds. At present, it is just available to those aged 25 or above.
12.49 - Business rates holiday will continue for 3 months
The full business rates relief will continue until June, then be discounted by around 67%. There will be a lower cap for businesses than can open.
There will be recovery loans of between £25k-£10m, with an 80% guarantee to lenders.
The reduced VAT cut (to 5%) for hospitality will continue until September, and then it will rise to 12.5%
12.47 - Restart grants for pubs up to £18k
Pubs can receive grants up to £18,000, as they will be opening later than non-essential retail businesses, Sunak confirmed again.
These will be delivered by local authorities, who will receive the funding from April.
12.45 - More incentives to hire apprentices
There will be an increased incentive for businesses to hire apprentices, with £3,000 paid to businesses to hire apprentices of any age.
This will apply to each new apprentice hired between 1 April to 30 September 2021.
12.43 - Self-employed support to continue
Support for the self-employed will continue until the end of September, with fourth and fifth payments expected.
This means 600,000 more people will be eligible.
The Chancellor said: "When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed a 2019-20 tax return.
"But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom only became self-employed last year can now claim the fourth and fifth grants."
The Self-Employment Income Support Scheme has been extended.
— HM Treasury (@hmtreasury) March 3, 2021
The 4th grant will cover February to April, worth 80% of average trading profits up to £7,500.
A 5th grant will be available from July.#Budget2021#PlanForJobspic.twitter.com/0Y2ses3qTe
12.41 - Furlough scheme extended
The Coronavirus Job Retention Scheme will be extended until the end of September, with employers asked to contribute 10% to covering staff wages in July, and 20% in August and September.
12.40 - Chancellor outlines economic forecast
The Chancellor said the Government will do whatever it takes to support people through this crisis.
Sunak said the Office for Budget Responsibility has forecast the economy will return to pre-pandemic levels by the middle of next year, sooner than had been anticipated.
It expects the economy will be 3% smaller in five years time because of the impact of coronavirus.
12.30 - Budget to begin momentarily
Chancellor Sunak is to set out his Budget plans in a few minutes, after Prime Minister's Questions wraps up.
Several measures have already been announced in the press, such as the extension of furlough until the end of September and an increase of the contactless payment limit to £100.
The Government also announced fresh grants for pubs, depending on their rateable value.
Operators will be keen to see what Sunak says about business rates and VAT.
Stay with the live blog to keep updated.
11.24 - 'Biggest announcement for hospitality in our lifetime'
Night time economy adviser for Greater Manchester and operator Sacha Lord has said this Budget is "make or break for many".
In terms of the Budget, today’s announcement could be the biggest announcement for hospitality and events in our lifetime. Make or break for many who have managed to make it this far. https://t.co/xVHuPMr1l8
— Sacha Lord (@Sacha_Lord) March 3, 2021
He called for support measures such as an extension of the business rates relief and VAT cut for hospitality.
11.11 - When will the Chancellor set out the Budget?
The Chancellor of the Exchequer is to outline his plans to protect jobs and boost the economy in the House of Commons this afternoon.
The Chancellor @RishiSunak has left Number 11 Downing Street and is on his way to @UKParliament to deliver #Budget2021.
— HM Treasury (@hmtreasury) March 3, 2021
Stay tuned to watch the speech live after Prime Ministers Questions. pic.twitter.com/3fZmQ6moCK
He will begin speaking a few minutes after 12.30pm.
10.48 - £150m fund for community pub ownership projects
The Budget will include a £150m fund to help communities revive their local pub, Chancellor Rishi Sunak has said.
He told The Sun newspaper: “Pubs and sports clubs are the heart and soul of our local towns and villages – they’re the glue that keeps us together.
“This fund will help to ensure vital local institutions aren’t lost to those who treasure them most.”
The Community Ownership Fund will allow communities to bid for up to £250,000 to save a nearby pub.
It is a four-year scheme and will open this summer, offering groups matched funding for the money they raise to buy a local asset. Communities can apply to the Government to double the money they have raised.
Consumer group the Campaign for Real Ale (CAMRA) welcomed the news.
CAMRA’s national chairman Nik Antona said the Government and local authorities must ensure that pub protection policies in the planning system are properly enforced to avoid property developers from exploiting the pandemic.
Antona said: "This would also give communities an opportunity and the time they need to use the new Community Ownership Fund to bid to take over the running of their local pub or social club if it is threatened with closure, change of use or demolition."
10.04 - What are the details of the furlough extension?
The Coronavirus Job Retention Scheme (CRJS) is to be extended up until the end of September, as reported by The MA yesterday (Tuesday 2 March).
The scheme, which pays up to 80% of a workers' wage, up to £2,500, has been extended numerous times previously and was due to finish at the end of April.
The Morning Advertiser understands employers will have to contribute 10% in July and 20% in August and September, towards the hours their staff do not work.
In addition, the Self Employed Income Support Scheme grant will also be available to claim from April, worth 80% of three months' average trading profits, up to £7,500.
The Chancellor is expected to announce further details as part of his Budget speech, alongside information about a fifth grant.
Reporting by Nikkie Thatcher
09.43 - 'You have the future of our sector in your hands'
Alex Reilley, co-founder of Loungers, has implored the Chancellor to not disappoint the hospitality sector this afternoon.
HOSPITALITY JUDGEMENT DAY @RishiSunak you have the future of our sector in your hands. Thousands of businesses & millions of people, employed directly or indirectly by the sector, will be hanging on your every word.
— Alex Reilley (@AlexReilley1) March 3, 2021
I’m feeling hopeful this morning - please don’t disappoint.
09.20 - 'More needed to allow recovery'
UKHospitality chief executive Kate Nicholls has said she is hopeful for an announcement of further support that will help businesses recover.
The trade body has been calling for an extension of the business rates holiday and VAT reduction for hospitality.
Early morning interviews ahead of a long day - welcome announcements re furlough and grants but more needed to allow a sustainable reopening and meaningful and speedy recovery for hospitality
— Kate Nicholls (@UKHospKate) March 3, 2021
08.57 - Contactless payments will be increased to £100
It has been reported the contactless card payment limit will be increased to £100, in a bid to boost consumer retail and leisure spending.
Chancellor Rishi Sunak outlined the plan to the Evening Standard newspaper.
He said: "As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the capital."
08.54 - 'Don't leave wet pubs behind'
Wet-led pub operators shared their concerns on social media that the Budget would exclude venues like theirs.
Dear @RishiSunak in the #budget please do not Exclude my WETONLY pub for a 4th time. 1st=VAT reduction on Hospitality food,we wet only, no food ! 2nd= #eatouttohelpout we no food ! 3rd alcohol with meal only , we no food ! @UKHospKate#PubsMatter@BIIandBIIAB@CAMRA_Official
— The Wonston Arms Pub (@thewonstonarms) March 2, 2021
08.45 - Pub sector braces for historic Budget
The Morning Advertiser (MA) will bring you the latest news and reactions from the Budget today (Wednesday 3 March).
Chancellor of the Exchequer Rishi Sunak will lay out his plans to revive the economy and protect jobs later today (in the House of Commons at 12.30pm).
Operators have described this Budget as one like no other, it will mean survival or collapse for many businesses.
Measures the trade has called for include extensions of the furlough scheme, business rates holiday and VAT reduced rate for hospitality.
The Coronavirus Job Retention Scheme will continue until the end of September, but employers will have to contribute from July, The MA reported last night.
