Hospitality sector: mini-budget judged a missed opportunity to help
The chancellor’s freeze on alcohol duty has gone down well with the beer industry, but the wider hospitality sector lamented a lack of announcements on help for hard-pressed pubs, restaurants and bars as they wrestle with the cost of living crisis.
In a mini-budget that outlined his growth-above-all approach to Britain’s finances, Kwasi Kwarteng froze duty on beer, cider, wine and spirits for a year, as well as pushing ahead with controversial plans to overhaul how the tax is applied.
Both measures extend policies implemented by his predecessor Rishi Sunak, although there will be an 18-month “transition” period for changes to duty on wine. Those changes sparked dismay among port and sherry producers because those penalise higher-alcohol products.
Kwarteng also extended his predecessor’s 5% “draught relief”, cutting the duty levied on beer and cider sold in pubs, so that it also covers smaller 20-litre kegs, a measure intended to help craft brewers. The British Beer and Pubs Association (BBPA) said the measures could boost the sector by £500m.
However, hospitality leaders said the measures in the mini-budget contained nothing new to combat soaring costs and fragile consumer confidence as sector continues to reel from the pandemic.
“The chancellor committed to making the UK a globally competitive tax regime, yet overlooked two obvious levers to achieve that, through lower VAT and business rates reliefs,” said Kate Nicholls, chief executive of the lobby group UKHospitality.
Nicholls said the government’s wider agenda of cutting taxes and regulation to boost growth could eventually bear fruit, but warned: “More is urgently needed to help struggling businesses survive through the winter. There’s a clear shortfall between the
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