Autumn budget: ‘grim’ future for hospitality

The Scottish Licensed Trade Association (SLTA) has slammed the UK chancellor’s autumn budget and raised concerns about the future of the hospitality sector.

UK chancellor Jeremy Hunt made his autumn statement in the House of Commons yesterday (17 November).

Commenting on the announcement, SLTA managing director Colin Wilkinson said: “The chancellor’s eye-watering budget leaves the Scottish licensed trade shedding more than just a few tears. There is nothing in it that gives us a fighting chance to get through the next few months – the future is grim.

“This week already, it has been confirmed that UK inflation hit a 41-year high in October, accelerating to 11.1% on the back of rising energy and food prices. This has major implications for our industry as we already know that some drinks manufacturers are increasing their prices, which means our pubs, bars and restaurants will have to do that too, directly impacting their customers.

“The reversal of the freeze on alcohol duty will also hit businesses and customers alike.”

No update on alcohol duty increase

There was no mention of the increase on alcohol duty in the budget. Trade body the Scotch Whisky Association (SWA) confirmed the decision on raising alcohol duty has been deferred until next year.

Mark Kent, chief executive of the SWA, said: “Over the next few months, we look forward to working with the chancellor who was true to his word and listened to the industry over the past month as we made the case for reinstatement of duty freeze.

“Previous freezes have consistently delivered more revenue for the Exchequer, and have enabled the industry to invest in our supply chain, create jobs, support hospitality – boosting the UK economy.”

Over recent weeks, industry bodies and professionals have been calling for the UK government to reverse its U-turn on alcohol duty.

Miles Beale, chief executive of the Wine and Spirit Trade Association, commented: “There is nothing to welcome or comment on following today’s autumn statement. We have no further information other than that the chancellor has not yet decided by how much, or when, alcohol duty will be increased.

“We will continue to ask to meet with Treasury ministers as a matter of urgency. We want to see support for businesses in our sector, including as small and as few increases to duty as possible in 2023. And to ensure that changes to the UK alcohol taxation system are fairer, simpler and are delivered with less red tape.”

‘Underwhelming’

Nick Gillett, managing director at UK distributor Mangrove UK, described the autumn budget as a “rather underwhelming day”.

He said: “What it was short of were the details around any glimmers of hope for hospitality – such as the proposed support for business rates and potential energy deals. These are yet to come, and I have my fingers crossed for this support matching the most optimistic commentators’ thoughts, but let’s see.

“Beyond that there was precious little for anyone out there and certainly no, or little support, or incentive for those entrepreneurs or risk takers who could perhaps tip the balance and improve the country’s finance.

“Why would you risk everything in this current climate? Some would argue that success is even punished by this tax regime but when you compare this to the challenges faced by the lowest paid or those in public service perhaps my gripe is misplaced.

“As we have seen before, the markets will dictate the success or otherwise of [yesterday’s] announcements. The best I can hope for is a stable environment where I can plan my resources and growth, and not be hit by unexpected tax rises.

“I would welcome a stronger pound, although others will disagree. Most importantly perhaps we can draw a line and move forward with a more positive outlook and, as I am directly tied to a healthy hospitality industry then obviously, a strong and vibrant sector would be welcomed.”