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Thu 17th Nov 2022 - Sector warns government support ‘nowhere near enough’ to safeguard industry despite £13.6bn package of business rates relief
Sector warns government support ‘nowhere near enough’ to safeguard industry despite £13.6bn package of business rates relief: Sector leaders have warned the government support in the autumn statement is “nowhere near enough” to safeguard the industry despite a £13.6bn package of business rates relief. In his autumn statement, chancellor Jeremy Hunt said the transitional relief scheme over the next five years would benefit thousands of pubs, restaurants and retailers, “with two-thirds of properties not paying any more”. There will also be a re-evaluation of business rates in April 2023. Hunt said: “Businesses are struggling with prices rising and growing uncertainty. This scheme will help reduce the bills that businesses face.” Hospitality relief will continue for a further year and increased to 75% but still capped per business. Of the business rates support, UKHospitality chief executive Kate Nicholls tweeted: “This package of measures should see the vast majority of hospitality business rates bills fall. This is helpful for the immediate cliff-edge faced in April where default was 10%-plus inflation-linked increase but business rates remain not fit for purpose or modern economy and must be reformed ahead of the next revaluation. Hospitality was facing nearly £1bn extra bill so this is welcome relief. It’s disappointing relief will be capped and online sales tax is also being abandoned – this was key to rebalancing and we urge the government to work with industry to take forward root and branch reform, tackle structural constraints to growth and investment in high streets and communities.” But there was no reduction in the rate of VAT the sector has campaigned for while no details were given on the planned increase in alcohol duty. Nicholls said: “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 the government addressed this today. It was also encouraging the chancellor confirmed 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. UKHospitality stands ready to work with government to develop such a plan and on the essential package of energy support post-April.” Emma McClarkin, chief executive of the British Beer & Pub Association, added: “It is right the chancellor has acknowledged of the need for changes to our business rates system and we welcome the extended and increased relief to 75% for pubs, so they do not continue to be penalised through unfair taxation. Urgent root and branch reform is still needed make business rates fit for the 21st century; the decision not to introduce an online sales tax it seems the government doesn’t recognise the completely archaic nature of the current system. The failure to provide any further relief for our industry today will hit pubs, breweries and their customers extremely hard this winter, and will have a devastating, lasting impact on communities across the country. Without lower beer duty or detail on whether energy costs will dramatically increase early next year, pub and brewers will still be forced to continue to make incredibly difficult decisions. They pulled through the pandemic but are now faced with an existential crisis that will undoubtedly force more business closures in the coming months, as they simply have no options left. More is needed from the government to secure their future.” Night Time Industries Association chief executive Michael Kill said: “This government is guilty of neglecting thousands of businesses and millions of employees and freelancers across the night-time economy, this Budget has not gone far enough and still lacks clarity, and will without doubt see a huge swathe of small and medium-sized enterprises and independent businesses disappear in the coming months. When businesses should be preparing for the busiest period of the year, they are now having to consider their future, and will remember the fourth failed attempt to deliver a Budget to safeguard businesses at the sharpest end of the crisis. There is no consideration for the human impact, this will have a devastating effect on not only business owners, but the individuals and families who have committed their lives and livelihoods to this sector.” Sacha Lord, night-time economy advisor for Greater Manchester, added: “Landlords and restaurant owners will be deeply concerned. 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 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.” Sam Martin, chief executive of Peckwater Brands, said: “Prominent voices from the hospitality space have been calling out for direct relief and support ahead of this and every other financial statement, but time and again no special measures are announced to support hospitality businesses. Businesses that have survived the pandemic, lockdowns, staff shortages and supply issues will now have to face the fresh challenges of austerity and downturn. The measures announced today like tax relief and the energy price guarantee will go some way to safeguarding our independent pubs, cafes, restaurants, and bars. We all hope that these measures will be enough to ensure stability and growth in the long term, but even with the intervention that has been announced, I predict a difficult year for hospitality businesses.” Hunt also announced employers national insurance contributions threshold will be frozen until April 2028. The threshold for when the highest earners start paying the top rate of tax will also be brought down from £150,000 to £125,000. The income tax personal allowance threshold will also be frozen until 2028. The dividend allowance will be cut to £500 by April 2024. Hunt confirmed the National Living Wage would increase 9.8% to £10.42 an hour. Hunt said difficult decisions “had to be taken” and acknowledged the UK was already in recession. He added: “These plans will tackle the cost-of-living crisis, rebuild our economy and significantly reduce borrowing over the coming years.”

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