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Morning Briefing for pub, restaurant and food wervice operators

Mon 17th Oct 2022 - Sector warns industry facing ‘one of the toughest winters in history’ as almost all of mini-Budget reversed
Sector warns industry facing ‘one of the toughest winters in history’ as almost all of mini-Budget reversed, alcohol duty freeze axed: Sector leaders have warned the industry faces “one of the toughest winters in history” after chancellor Jeremy Hunt abolished almost all the tax cutting measures announced in the mini-Budget. The Night Time Industries Association (NTIA) said the statement “may calm the markets, but has critically compromised thousands of businesses and workers across our sector”. Hunt has axed the planned cut in income tax from 20% to 19% “indefinitely” while alcohol duty will not be frozen. The government will ditch plans for new VAT-free shopping for international tourists. Hunt also announced there would now be a Treasury-led review into energy support for households beyond April with businesses still set to receive “targeted support”. He said: “Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.” But he warned “more difficult decisions will need to be made” on tax and spending. NTIA chief executive Michael Kill said: “In less than 40 days in office the prime minister has crashed the economy, placing an insurmountable level of pressure on businesses and people's livelihoods. The statement from the new chancellor, may calm the markets, but has critically compromised thousands of businesses and workers across our sector. This will create further uncertainty around energy costs after April 2023, and will see alcohol duty add to an already untenable operating costs. Our industry is now facing one of the toughest winters in history.” UKHospitality chief executive Kate Nicholls added: “Given the economic volatility we have seen over the past few weeks, we understand the need for the chancellor to announce these measures today, designed to deliver stability and restore confidence. I would encourage the government to work with the UK’s hospitality sector to unlock its enormous potential to support our economy in delivering growth, creating jobs and driving the recovery. Prior to the energy crisis, which is proving to be so devastating, the sector was forecast to grow by 3% and there is still a real desire from our dynamic hospitality businesses to return to those levels of growth. However, the hospitality sector is so exposed to this crisis and has been devastated by it, which is why the energy support provided by the government to help weather this storm, remains critically important and will help protect a vital industry. It’s essential the government continues to work closely with the sector as part of its review into support post-April 2023. One area in dire need of urgent reform is the business rates system, which is currently not fit for purpose and places an unfair burden on hospitality businesses. This is particularly pressing now, given the additional costs hospitality businesses will now be facing as a result of the freeze on alcohol duty being scrapped.” Emma McClarkin, chief executive of the British Beer & Pub Association, said: “The chancellor’s decision today to reverse the alcohol duty freeze is a huge blow to brewers and pubs. The freeze would have delivered a £300m saving to our industry at a time when we desperately need any relief we can get, to help to keep a lid on spiralling costs and keep the price of pint affordable for pub goers this winter. The cost of doing business is completely out of control for pubs and brewers and the failure to act today to reduce pressures on businesses will hit them extremely hard. Our sector needs stability to plan and be able to keep serving communities at a reasonable price, but instead has been subject to ongoing uncertainty for too long. Waiting until a February Budget to ease these pressures will be too late, we need the chancellor to act before winter really starts to bite for our brewers, pubs and the customers and we lose them forever in communities across the UK.” Steve Alton, chief executive of the British Institute of Innkeeping, tweeted: “In the chancellor’s emergency statement he stated that growth requires confidence and stability. With our members facing huge instability now with escalating costs and no clarity on any further support, urgent action is needed to safeguard their future.” Sacha Lord, night-time economy advisor for Greater Manchester, said: “Today's announcement is a clear signal of the lack of leadership at the top of this current government. While we wait to see the impact of these further announcements, and we can only hope they are positive, the key takeaway is the prime minister is no longer in charge and that those currently making decisions that impact on everyone in the UK lack a public mandate to do so. For one of the biggest global economies, we are simply sailing too close to the wind with no strategic direction.”

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