'Fortunes of the sector hang in the balance': dismay at Chancellor's energy statement

By Rebecca Weller

- Last updated on GMT

Government must act now: BBPA calls for further support for the sector (Pictured: BBPA chief executive Emma McClarkin)
Government must act now: BBPA calls for further support for the sector (Pictured: BBPA chief executive Emma McClarkin)

Related tags Bbpa Government Legislation Finance ukhospitality

Government must act now to help businesses experiencing an “acutely painful” time as the Chancellor's statement yesterday (Thursday 26 May) "left the fortunes of the hospitality sector hanging in the balance", according to the Beer and Pub Association (BBPA).

The support proclaimed in Chancellor of the Exchequer Rishi Sunak’s announcement this afternoon included a new one-off cost-of-living payment of £650 for low-income households with separate one-off payments of £300 to pensioner households and £150 to individuals receiving disability benefits.

BBPA chief executive Emma McClarkin said: “It is right the Government helps those who are struggling; however, this is an acutely painful time for business as well.

“We need the Government to act now and take measures to immediately bring down costs and alleviate the pressures on our pubs and brewers."

Impacting ability to do business 

She added: “The fortunes of our sector hang in the balance. Just as we emerge from the pandemic, we have immediately been hit by rising energy prices, food, and supply chain inflation due to the war in Ukraine and a cost-of-living crisis that is severely impacting our ability to do business.  

“This is why we have been calling for an energy price cap for small businesses to ensure fair energy deals for businesses across hospitality and beyond.”

Sunak told the House of Commons his strategies for combatting inflation and soaring energy costs would encourage investment rather than deter it.

Huge burden 

The Chancellor stated the Government is “on the side of hard-working families” as almost 8m of the most vulnerable households in the UK will receive financial aid totalling £1,200.

Furthermore, Sunak also announced the energy bills discount due to come in from October was to be doubled from £200 to £400, with the need to pay this back scrapped as the Chancellor described this as now “unambiguously a grant”.

McClarkin added: “A further package of small business support is needed to reduce the huge burden and allow pubs and brewers to get back on their feet instead of placing more barriers in the way of their recovery.”

UKHospitality chief executive Kate Nicholls stated the announcement was a welcome signal the Government was targeting inflation.

She said: "Direct, focused cash payments for lower income households will hopefully shore up some consumer confidence but now we need a commensurate focus to reduce the costs of doing businesses, to reduce further price rises.

 “The Government needs to identify and accelerate policies that will cut costs, minimise red tape and accelerate growth. A reiteration of its commitment to cut business taxes to incentivise investment in high streets, people and innovation would also help to settle nerves across many sectors, including hospitality. Then we can collectively take a longer term look at the best raft of measures for inclusion in the Autumn Budget.”

In addition, the Night-Time Industries Association (NTIA) also hit back at the Chancellor's announcement. repeating calls for VAT to be cut back to 12.5%.

CEO Michael Kill said: "We welcome this gesture of support for consumers although somewhat light touch, given the gravity of the current pressures.

“But feel hugely disappointed and frustrated that the Chancellor and the Government has not taken the opportunity to fully support businesses within this announcement at such a critical time.

“Time is running out for businesses, as costs ramp up, we continue to call for a reduction in VAT back down to 12.5% and an energy cap for SME businesses.”

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