Trade bodies, pub companies and operators from all corners of the sector told The Morning Advertiser (The MA) without these measures, more job losses and pub closures were on the horizon.
Independent operators
Independent publicans warned previous Budget measures eroded profitability and forced them to cut staff, pause investment and rethink entire business models.
Owner of the Murderers/Gardeners in Norwich Phil Cutter said profits had been “massively impacted”, with inflation continuing to intensify the strain.
“Hospitality simply cannot maintain price increases at the current rate,” he said. “The cumulative impact means we are no longer hitting the margins we were 12 months ago.”
Cutter told The MA tax reductions would allow the sector to grow: “Any reduction in VAT would be fantastic. A 5% reduction alone would stimulate growth and investment,” he added, warning without cost-cutting measures “more venues would close”.
Meanwhile owner of Barr & Barr Hospitality Group, which operates three pubs across West Sussex and Dorset, Rob Barr, said inconsistent messaging from the Government had exacerbated the situation.
“U turn after u turn and leak after leak has added zero confidence to consumers, which in turn impacts trade,” he said. Barr called for the reversal of Employer National Insurance (ENICs) contributions, business rates reform and a 5% VAT cut.
Without change, he cautioned he may have to overhaul his business model: “We can’t keep passing costs onto guests and operating in an extremely low growth, low confidence market.”
In the Cotswolds, operator Emma Gibbon, who runs the Plough in Prestbury and the Hewlett Arms in Cheltenham, said last year’s NIC increases had forced her to stop serving food and close down the kitchen at one of her sites.
“It became unviable for us to run…instead we have chosen to have a permanent ‘pop up’ residency,” she explained.
While the shift has cut costs, it meant local suppliers “lost business”, Gibbon added: “We are dumbfounded as to how the Government cannot see if you make it more expensive to employ people then small, already struggling businesses will halt recruitment or lower hours as a consequence.”
Gibbon told The MA pubs needed business rates reform, VAT cuts and reversal of NICs increases next week, describing them as essential to prevent closures.
Without targeted support in the Budget, she said she would have to “seriously consider” shutting one of her pubs.
“The industry has been milked dry,” she warned. “The Government cannot tax its way to growth.”
Pub companies
Pub companies echoed these concerns, stressing targeted relief, particularly on business rates and beer duty, was essential to safeguard community venues.
A Punch Pubs spokesperson told The MA the sector needed business rates reform, beer duty cuts, extended draught relief and a VAT reduction on food and drink.
They also called for a freeze on Machine Games Duty, describing it as a “vital income stream” for some pubs.
“Our publicans are the heart of communities...With the right support, they can continue to drive growth,” the spokesperson said, warning of “further margin pressure and reduced investment” if the Budget falls short.
Greene King also implored the Chancellor to deliver “the maximum possible cut to the business rates multiplier”, alongside long-term reform.
“The combination of the cost of doing business alongside price and wage inflation provides a significant challenge,” a spokesperson said.
“Pubs can be key drivers of economic growth, providing investment in communities and local employment. But if costs are raised higher, this makes it harder to invest.”
In a recent post to LinkedIn, Stonegate CEO David McDowall echoed calls for reversing NIC hikes, meaningful business rates reform and VAT cuts.
The CEO added he had never seen the sector under greater pressure, citing data from UKH that showed £3.4bn in new annual costs have hit hospitality.
He continued: “The real story though, is we are failing to support a pillar of our economy that has the potential to be a real engine for growth, and to have a positive impact on job creation, and communities all over the UK.”
Trade bodies
Sector-wide, trade bodies told The MA the Budget would determine whether thousands of pubs survived next year.
Campaign for Real Ale (CAMRA) campaigns director Gary Timmins said success depended on measures to “stem the tide of pub closures”, calling for business rates reform, VAT and beer duty cuts, and scrapping NICs increases.
“Anything less… and our much-loved locals will continue to be on a knife edge,” he said, adding the Chancellor has “no excuses” not to provide a support package for the sector.
“We have lost too many pubs this year, with many more on the brink of becoming another statistic.
“Pubs will close their doors for good, and communities across the UK will lose their social hubs forever. The situation cannot be expressed any clearer than that”, he continued.
The British Institute of Innkeeping (BII) reported one in three members were currently unprofitable, with 35% at risk of closure.
CEO Steve Alton told The MA VAT cuts and business rates reform were essential: “A Budget that does not relieve at least some of the cost pressures…will be devastating."
“The substantial tax contribution we make to the Treasury as a sector will not increase with further taxation, it will decrease.
“A successful Budget would reduce the significant financial pressures placed on these small, but essential businesses, and recognise the immense value they provide to communities.”
Meanwhile, UKHospitality (UKH) chair Kate Nicholls said the fiscal address was “make or break”, noting 13 consecutive months of falling employment and 170,000 fewer people on payroll since last year’s Budget.
“If the Government wants to get people back into work and revitalise high streets, it needs our pubs firing on all cylinders,” she said, calling for lower business rates, NICs fixes and VAT cuts.
The British Beer & Pub Association (BBPA) told The MA tackling Extended Producer Responsibility (EPR) costs was also critical.
“Without meaningful support… we shouldn’t be surprised if pub closures accelerate,” the organisation said, estimating 2,000 pubs could close next year without intervention.
- Look out for The Morning Advertiser’s live blog coverage of the Budget on Wednesday 26 November.
