Chancellor Rishi Sunak delivered a confident Autumn Budget this week pumping more money into the economy in the hope that it will circulate its way around and back into the Treasury. The hospitality sector is one of the routes Sunak is looking to recoup this money, offering concessions that will enable the sector to continue its recovery through business rates reductions and beer duty cuts. Probably not enough to do the job, it was still considered sufficient to keep levels of optimism riding high in the industry.
Earlier in the month, the joke circulating the corridors of Westminster was Boris Johnson’s decision to shift 6ft 5in MP Simon Clarke into the post of chief secretary to the Treasury. A big appointment, not least to a chancellor who stands at just 5ft 6in. When they were last pictured, it looked like Mr Clarke was conducting a tour of the Treasury to local schoolchildren. How Boris must have guffawed at that.
Wednesday in Parliament, what Sunak lacked in height he certainly gained in stature delivering a Budget that many people found fairly pleasing to the eye. Boris wouldn’t have found that vision as funny given his next door neighbour’s aspirations to move house just one down the street.
The astute chancellor may be short on inches, but his political stock is certainly flying higher.
The response to the Budget from the industry has been surprisingly warm – especially with the cold winds of 5 percent inflation, 25 percent corporation tax and escalating fuel prices all heading our way in the next few years. But business rates relief continuing at 50 percent for the next year, a beer duty freeze, gaming duties tied to inflation, helped warmed the cockles of an industry that is just desperate to get back to trading as normal as possible.
And therein lay the message behind the response to the budget; don’t make it any worse than it already is.
Sunak read that pretty well and delivered a statement that won’t ensure recovery, but it will certainly help it.
Bacta, who got nothing in the way of MGD concessions, were grateful for the ‘sweeties’ the chancellor was handing out – business rates halved for another year topping that list.
Kate Nicholls from UKHospitality was equally content with the rates concession, albeit it was only 50 percent of what they had sought. And she was quick to remind the Treasury that hospitality remains in a fragile state and the government needs to act with care.
Likewise for the BBPA where Emma McClarkin welcomed the £440 million boost to the pub sector from the budget, especially the beer duty freeze which was a real boost to the trade. Her but, though, was aimed directly at business rates where she urged an effective review of the system – it was not too difficult to read between the lines, but McClarkin would not be crying into her beer if they were abolished completely.
Peter Hannibal of the Gambling Business Group was measured in his response; happy with the business rates and beer concessions, but disappointed with the chancellor’s decision not to keep hospitality VAT at 12.5 percent on a permanent basis. And it’s stakes and prizes where Hannibal continues to keep his focus; they must, he says, be able to keep pace with inflation.
All in all, the chancellor sprinkled a few nuggets around the industry as well as £150 billion extra into the economy and people were pretty content with that. Whether that’s the case when he next comes back to the despatch box with a chancellor’s statement remains to be seen. On that occasion he’ll be trying to claw back that £150 billion, plus the £400 billion or so already thrown at the economy to fight off Covid.