Critical Action Needed In The Budget To Support Vital Eating And Drinking Out Businesses

The eating and drinking out sector is a major asset to the UK economy and has the ability to drive further growth, but could face barriers to growth without decisive, targeted support from the Government. Pubs, bars, restaurants and nightclubs are set to see a £220 million tax hike at next month’s Budget, through increases in business rates and excise duty.

In its submission to the Autumn Budget, the ALMR has highlighted the outstanding work in job creation and investment being done by the sector, but called on the Government to safeguard employment and growth.

The UK’s eating and drinking out sector generates £63 billion in economic activity and adds £23 billion to the UK’s GDP. Venues in the sector also directly employ 1.6 million people, around 7% of all private sector employment, and have created 30% of all net new employment in the last year.

This growth is at risk, however, as costs pressures on businesses continue to increase and consumer and investor confidence falls, with instability caused by Brexit a particular concern.

The ALMR has therefore called upon the Government to immediate, short-term support by:

  • Undertaking a much-needed and long overdue reform of the business rates system
  • A freeze, or at least a cap, in the multiplier for April 2018
  • Increasing pub-specific relief to £5,000 per annum and broadening it to include the wider eating and drinking out sector
  • Freeze Alcohol Duty excise rates
  • Committing to be led by the Low Pay Commission’s recommendations when determining minimum wage rates.

And securing the long-term health of the sector by:

  • Securing a future immigration policy that recognises the eating and drinking out sector’s workforce
  • Working with businesses in the sector to produce a post-Brexit tax and regulatory regime that promotes growth and allows the sector to compete globally.
  • Outlining its intention with regards to hospitality sector VAT in Northern Ireland and in a post-Brexit environment

ALMR Chief Executive Kate Nicholls said: “With Brexit on the horizon, this is a hugely important moment for the UK. This could also be a crucial Budget for the eating and drinking out sector. Unquestionably, cost pressures are rising at a time of maximum uncertainty and confusion for employers.

“The eating and drinking out sector is currently doing some fantastic work, revitalising high streets and driving employment and growth; but these businesses are not immune to pressures. The sector is facing a massive £213 million tax hike through increases to rates and duty which will have a considerable impact on investment and growth.

“The Government has the power to provide support for vital UK business that will ease pressure, provide stability and help them unlock even greater potential.

“Eating and drinking venues in towns and city centres are fantastic social and communal assets as well as being brilliant employers. They can be one of the most important pillars of the economy as the Government looks to grow the UK economy outside of the EU. This can only be achieved if these crucial businesses have the support and opportunities they deserve.

“If the Government wishes to lay the foundations for a strong UK economy that will prosper over the coming decades, a great first step would be to act to support those businesses that play a significant role in the fortunes of local economies in every part of the country.”