Industry reacts to autumn budget
In the autumn statement, chancellor Jeremy Hunt outlined the UK government’s plans to support hospitality firms in a bid to “soften the blow” of the recession.
While presenting the autumn statement in the House of Commons today (17 November), the UK chancellor confirmed the government would provide a £13.6 billion (US$16bn) package of business-rates support to help companies through the next five years of economic uncertainty.
In the autumn budget, Hunt promised that two-thirds of properties “won’t pay a penny next year”, stating that “thousands of pubs, restaurants and small high street shops” will benefit from this move.
UK Hospitality CEO Kate Nicholls said this was “welcome news from chancellor” and a “welcome relief” for the hospitality industry, which was facing an extra bill of up to £1bn (US$1.18bn).
“I’m pleased that the chancellor has listened to the vast majority of UK Hospitality’s proposals on business rates, covering a freeze in the multiplier, extended reliefs and no downward transition,” Nicholls added. “This means those seeing their valuations decrease will see the benefit in their bills immediately, at the same time as increases are capped.”
However, Nicholls went on to say that the current system is “outdated and not fit for purpose”.
“The government made a manifesto commitment of a root-and-branch review, and it is essential that is this delivered as soon as possible,” she stressed.
“It was encouraging that the chancellor confirmed that energy support will continue post-April for the most vulnerable sectors, of which hospitality has already been recognised.
“What we failed to hear today from the chancellor was any plan for economic growth, despite him recognising its importance. Businesses create jobs, deliver higher wages and contribute millions in tax revenues but without a serious plan from the government, margins continue to be squeezed without a path forward to growth.
“There is nothing to give firms confidence, let alone invest, and we need to see an urgent plan for economic growth and how business will be at the centre of that.
“UK Hospitality stands ready to work with government to develop such a plan and on the essential package of energy support post-April.”
Sacha Lord, the night time economy adviser for Greater Manchester, raised concerns about consumer behaviour during the financial crisis for the hospitality industry: “With these announcements, we will inevitably see a notable downturn in consumer spending over the coming weeks and months, at a time when operators need the most support as they recover from the hangover of pandemic-related debt.
“Disposable income underpins our UK economy and I’m hugely concerned that the policies outlined today will create a severe contraction in the sector. Spending on luxuries such as dining out is naturally the first to go in times of cutbacks and the hospitality sector is wide open to be the first to suffer.
“Operators are being squeezed beyond their ability, and I fear we will now see huge cuts in staffing, reductions in opening hours and venues closing at a faster rate faster than seen during the pandemic.
“It is a very sad state of affairs and there will be many extremely worried business owners in the UK tonight.”
Nicholls added: “The chancellor painted a grim picture of what we’re facing as a nation and Britain’s hospitality businesses are already in the midst of severe economic turmoil.
“Survival this winter is the priority for venues across the country and there is the very real possibility that a significant proportion of our sector will not survive the winter. It was crucial that the government addressed this today.”
Earlier this week, more than 100 industry professionals collectively urged the chancellor to cancel its double-digit tax rise on spirits, wine, cider and beer. While there was no mention of the tax in the autumn statement, the Scotch Whisky Association confirmed the decision has been deferred until next year.