An industry body has warned that pressures from the announcement could lead to closures and job losses and is calling for reversals to the decision made by the Chancellor last month
A quarter of independent pubs could disappear due to additional burdens from the autumn Budget, it has been warned.
The British Institute of Innkeeping, which represents 13,000 publicans, said rising business rates and an increase to employers’ national insurance contributions could lead family-run inns to call last orders. It said a survey of its members showed “one in four independent pubs are set to fail as they face a wall of taxes from the Chancellor’s Budget”.
Pub bosses have raised concerns over the planned increase to employers’ national insurance contributions and a cut from 75% to 40% in relief given to hospitality firms in business rates, as announced by Chancellor Rachel Reeves in the Budget on October 30.
The BII added: “Our members, independently operating pubs in every community across the UK, were already struggling to make a profit ahead of the Budget announcement. The new costs of employment and increases in business rates will render 80% unprofitable, leading to at least one in four pubs closing. The Budget, billed to support working people, will pull the rug out from under these already fragile small businesses and significantly reduce the employment opportunities they can provide.”
BII said three quarters of operators would slash staff hours, two fifths were set to reduce opening hours and one in three planned to make staff redundant. The spokesperson added: “The steps taken by the Chancellor in the Budget announcement will simply lead to lost jobs.”
Publican Rosie Nagaty, of The Old George Inn near Doncaster, told The Mirror that the Budget had not gone far enough in terms of helping the hospitality industry. She also raised concerns about an increasing staffing bill following the minimum wage increases, saying: “This will have a massive impact as the wage bill is already really high.
“During the summer period, we take on a lot of seasonal staff who tend to be younger. I’d be looking at taking on fewer staff and I already work 12 hours a day, but it means I’d have to work even more hours myself.”
Rosie, 36, also estimated she would have to find an extra £500 a month from the end of March, when the 75% business rates relief is lifted. Pubs have suffered in recent years due to a combination of soaring running costs and the cost-of-living crisis impacting customer behaviour, with 50 a month in England and Wales calling last orders for good in the first half of this year.
BII chief Steve Alton said: “Ahead of the Budget, it was clear that many pubs were unprofitable, through exceptional costs of doing business, with ongoing high energy costs, embedded high inflation in food and drink costs, as well as spiralling employment costs alongside repaying Covid debts.
“The Government’s response has been to ask these small, fragile pub businesses to pay additional taxes – for many 10% of their current turnover in new costs.” Mr Alton said there had been a “surge” in calls to the BII’s helpline since the Chancellor announced the Budget. He called on Ms Reeves to reverse the increase to National Insurance Contributions and reinstate business rates relief to the 75% discount.
Mr Alton added: “Our nation’s pubs are unique in their social value and how they operate. They are not digital businesses, they have to occupy buildings at the heart of their communities.” The Mirror approached HM Treasury for comment.