Autumn Statement delivers rates disappointment

Claire Dodd

Claire Dodd

24 November 2016

The drinks and hospitality industry have reacted with disappointment to chancellor, Philip Hammond’s autumn statement, with trade bodies saying they will continue campaign for cuts to beer duty and rates reform ahead of the 2017 spring budget.

Addressing parliament yesterday, Hammond confirmed a freeze in beer duty, and 100% rates relief for rural pubs, however there was little else for the industry to celebrate.

Brigid Simmonds, chief executive, of the British Beer & Pub Association (BBPA), said that though some concessions had been made towards lessening the impending impact of next year’s business rates increase, they didn’t go far enough.

'Whilst we support the reduction in the cap on transitional rate relief,” she said, 'The BBPA and other industry bodies had written to the chancellor calling for broader support on business rates. We want to see enhanced relief for pubs that will be hit hardest by the 2017 revaluation, and an overall review of how rates impact on Britain’s pubs.'

Association of Licensed Multiple Retailers (ALMR) chief executive Kate Nicholls added: 'The lowering of transitional relief caps and the increase in rural relief is welcome, but this still falls far short of the wholesale change that many businesses are looking for and that some will need in order to invest and grow.

'The government has indicated that further announcements on rates are to be made by DCLG and we hope that this will provide better news and a more productive step towards tackling rates bills that are a serious difficulty for many businesses.'

Meanwhile beer trade groups tentatively welcomed the freeze in beer duty, but called for more action. Mike Benner, Society of Independent Brewers (SIBA) managing director, said: 'SIBA welcome the chancellor's decision not to increase beer duty and support independent British breweries and pubs at a challenging time, but we had hoped for more support on business rates for pubs.

'We are calling for further cuts to beer duty in the budget 2017 and beyond to help repair the damage caused by the beer duty escalator between 2008 and 2012 which lead to increases in beer duty of 42% and saw beer sales in pubs fall by 24%. The industry supports almost one million British jobs and deserves further support to enable it to continue to bring pleasure to millions of people.'

Another cost pressure due to impact businesses next year is the national living wage. Hammond confirmed this will rise from £7.20 to £7.50 from April next year, the equivalent of a £500 a year pay rise for a full-time worker.

Nicholls added: 'The increase to the rate of national living wage is lower than previously forecasted and will put money back in the pockets of our customers, but will still tighten margins for businesses and some will struggle to afford it.

'If wage rates are to be affordable and equitable, the government must step away from a policy-driven rate and ensure that any increases are independently set by the Low Pay Commission reflecting the economic landscape.'

Brigid Simmonds, chief executive, of the BBPA, said: 'We understand action to help those on low pay, but given the current economic uncertainty there is a real need to look at the cost pressures facing pubs. Increases in the national minimum wage and living wage represent challenges for our sector, particularly in pubs, where labour costs are high, at between 14% and 25% of operating costs.'

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