Wetherspoon President Tim Martin warned today that the alcohol duty freeze did not go far enough to help bars as business chiefs warned that hospitality jobs remain “on the edge of the knife”.
In his ‘mini-budget’, Chancellor Kwasi Quarting announced that planned fee increases on beer, wine and spirits would be scrapped as part of a budget filled with £45 billion tax cuts.
The Treasury claimed the freeze would save £600m – the equivalent of 7p on a pint of beer, 4p on a pint of cider, 38p on a bottle of wine and £1.35 on a bottle of spirits.Read:Zelensky welcomes the creation of the Horizon Capital Growth Fund for investments in Ukraine
Alcohol fees usually rise in line with the retail price index, which is at 12 percent – the highest level since the 1980s. But Kwasi Quarting said that rally won’t happen next year after he “listened to the industry’s concerns”.
In response to the announcement, Martin told MailOnline: “We welcome the freezing of alcoholic beverage fees, but the real problem for bars is that they pay much higher labor rates per liter than supermarkets, and in addition, bars pay 20% VAT on food sales. Pay supermarkets. nothing.
“As long as this inequality persists, pubs will decline and supermarkets will thrive.”
The CEO of Wetherspoon called the alcohol duty freezing “welcome” but said there was still “inequality” between taxes paid by pubs and supermarkets.Read:Liz Truss and Kwasi Kwarteng have driven our economy off a cliff
John Collins, CEO of Live, which represents the UK live music sector; Michael Keel, of the Night Industries Association, said Mr Kwarteng had not done enough to help with hospitality
Mr Kwarteng will also expand the relief draft to cover smaller kegs of 20 liters and above to help microbreweries – a move praised by the Real Ale campaign.
But Sacha Lord, the night economy consultant for Greater Manchester, has been critical of the package.
No VAT or hospitality business support. Corporate tax cuts are completely useless if businesses don’t turn a profit, or worse, if they close.
These announcements will now mean the last orders of thousands of hospitality companies, which will mean mass layoffs.
I’m totally clear. This government is only about big business, corporations, and fat cats.
They just sent a powerful message to the hospitality industry: They don’t care. They just tossed the small, family-run business to the wolves.Read:Mystery as two of Hanley’s top restaurants currently closed
The chief executive of Live, which represents the UK’s live music sector, said companies already struggling could “face bankruptcy and shutdown”.
John Collins said: “While we are pleased to see the government taking steps to mitigate the cost of living crisis, today’s announcement does little to offer the UK’s world-leading live music industry.
“Jobs are already on the brink, and we agree with the chancellor that there are many barriers in sectors like ours where the UK leads the world.”
Michael Keel, chief executive of the Night Industries Association (NTIA), said he was “extremely disappointed” with the announcement.
He added: “It will be seen as a missed opportunity to support companies that have been hit hard during this crisis, causing a great deal of anxiety, anger and frustration across the sector as they once again feel that many will be left behind in the cold.
We have been very clear with the government that the energy bill relief plan, even with the announcement of limited tax cuts on National Insurance and corporate taxes and fees, is unlikely to be enough to ensure companies have a financial margin to survive the winter especially with yesterday’s announcement of a rate hike. from the Bank of England.
He added: “I would urge the Chancellor and the government to reconsider these measures, given the limited effects of the current tax cuts on the current crisis for many businesses across the sector, and the very fragile situation that the night economy and hospitality sectors remain in. And reassess the inclusion of exemption from public business rates and a reduction in value-added tax within these measures.
The Treasury claimed the freezing would save £600 million – the equivalent of 7 pence on a pint of beer, 4 pence on a pint of cider, 38 pence on a bottle of wine, and £1.35 on a bottle of spirits.
Elsewhere, Mr. Kwarteng’s announcements enjoyed a warmer reception, with the Independent Brewers Association today saying it provided “additional support for a struggling sector”, while the Campaign for Real Ale (CAMRA) called it “great news”.
Quick overview: What did the chancellor announce?
It scrapped the 45p tax rate, paid by those earning more than £150,000, from April next year.
Annual cost: £2 billion
1p Lower the basic rate of income tax for a year through April 2023
Annual cost: £5 billion
No stamp duty is payable on property purchases of up to £250,000 and up to £425,000 for first-time buyers
Annual cost: £1.5 billion
Re-introduction of VAT-free shopping for foreign tourists
Annual cost: £2 billion
The cancellation of the increase in National Insurance contributions from November 6th
Annual cost: £15 billion
Cancel the planned increase in corporate tax for next year so that the tax remains at 19 percent
Annual cost: £18 billion
Taxes will be reduced for companies located in 38 new “investment zones” and will benefit from the abolition of planning rules
Annual cost: Unspecified
Repeal the cap on bankers’ bonus in an attempt to strengthen the city
Cost per year: none
Annual total cost with other measures: £45 billion
CAMRA President Nick Antona said: “`The Chancellor’s announcement that a new fee rate for barrel beer and cider will go forward from August 2023 is great news for a great British citizen because the tax system will recognize that beer, cider and berry served in the pub should be taxed or Social club at a lower price on alcoholic drinks bought from the likes of supermarkets.
Crucially, this new beer and cider new tax rate will apply to containers of 20 liters or more and to bagged produce – not the larger 40-liter containers originally planned – meaning that microbreweries, cider producers and bars can all the benefits.
This pioneering policy should help attract consumption to bars, clubs and pub cabins to help encourage pub-going and keep our beloved locals viable and thriving.
Meanwhile, a spokesperson for the British Spirits Alliance said: “Today’s decision is a vote of confidence in the UK spirits sector, and a welcome relief for British distillers and consumers alike.
Our sector, like many others, has been affected by inflation and rising costs across the supply chain. The chancellor’s announcement today, and the government’s announcement of a package of support measures for businesses and consumers, is a huge boost for the industry.
The customs freeze accompanied the cancellation of next year’s planned increase in corporate tax, so the tax will remain at 19 percent.
Meanwhile, bars will also benefit from an energy easing scheme, which will see gas and electric bills cut.
Mr Kwarteng told the House of Commons: “Our quest for modernization also extends to alcohol duties. I have listened to the industry’s concerns about ongoing reforms. I will therefore introduce an 18-month transition measure for wine duty.
I will also expand the relief draft to cover smaller kegs of 20 liters and up, to help smaller breweries. And in this difficult time, we are not going to let alcohol fee rates go up in line with the RPI.
“So I can announce that all planned fee rate increases on beer, cider, wine and spirits will be cancelled.”