Struggling pubs going through ‘timebomb’ in surging prices as brewers urge Reeves to chop beer obligation in Budget
Struggling pubs and brewers could face an extra £310 million in rates and duty in the upcoming Budget.
Calculations by the British Beer and Pub Association have found that unless the Government takes urgent action, the sector faces a “timebomb” in soaring costs. The BBPA said that, should the business rates relief end – as currently scheduled to at the end of March – along with an inflationary uplift, it would cost the sector approximately £235m.
Meanwhile a rise in beer duty by 2.1% in line with inflation (RPI), as is default, would cost the sector approximately £75 million. The BBPA is calling on the Government to cut beer duty, reform business rates, and maintain the “vital” business rates relief for the sector to carry on contributing to the economy and job market.
A 5% cut in beer duty in the upcoming Budget would result in up to 12,000 additional jobs, mainly in pubs, it said. Recent data has shown around 50 pubs are closing each month in England and Wales, with factors including soaring bills and the cost-of-living crisis impacting customers’ spending behind this.
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Latest figures revealed that the beer and pub sector contributed £34.4billion to the economy and supported more than a million jobs in one year. The BBPA said further hits to the industry could “dramatically choke growth” and threaten the survival of small businesses and risk vital jobs across the UK.
Emma McClarkin, BBPA CEO said: “The clock is ticking on this Government to uphold their pre-election promise to support our industry. Government must be clear-eyed about the staggering extra costs which will choke growth, be bad for business, and risk people’s livelihoods.
“Our industry pours billions into the economy, forms the backbone of the UK job market and is a cornerstone of the community yet, with pubs making an average of just 12p a pint thanks to the huge cost of doing business, it is in a fragile state. If the Government doesn’t act then communities, jobs, and the economy will pay the price. If Government invests in the industry, then we can continue to boost the economy, employ more people, and remain a home from home.”
A Treasury spokesperson said: “We’re supporting businesses like our well-loved pubs through pledges to make the business rates system fairer, cap corporation tax at 25% and to publish a corporate tax roadmap so that they have some welcome certainty to plan for the future.”
