Chancellor Philip Hammond declared an end to the era of austerity in his Budget speech yesterday, a claim and a generalisation, but what was the reaction from our industry, how will it impact hospitality and catering?
UKHospitality Chief Executive Kate Nicholls was positive saying: “This was a positive Budget for hospitality, recognising and acknowledging our core campaigns around employment costs, business rates and digital paying its fair share – together with a positive outcome on excise duty, latte levy and non-residential capex and investment allowances. We estimate the measures announced in the Budget as a result of our campaigns are likely to save the trade £750m.
“Hospitality businesses have been devastated by spiralling business rates costs, so steps to address this are welcome. UKHospitality has exhaustively campaigned for support for the sector on business rates, so it positive to see the Government listening.
“Cutting bills for smaller businesses by a third will provide some much-needed support and is a positive move by the Government. This, along with the introduction of a new tax on digital businesses, to ensure they pay their fair share, needs to be a springboard for further businesses rates reform.
“The funds raised by this new tax should be used to ease the unfair tax burdens being shouldered by hospitality businesses to help stop the continued devastation of high streets. If the Government is serious about updating the rates system then we still need to see a thorough, root and branch reform of the whole system to ensure it is fair and fit for purpose in the 21st Century.
“Reducing the cost of apprenticeships for SMEs is a pragmatic and positive step towards tackling recruitment and retention problems being faced by businesses.
“The hospitality sector has already taken, and continues to take, effort to tackle plastic waste and UKHospitality has been working with its members and the wider sector to help drive this. As the Chancellor rightly said, a latte levy would not necessarily help tackle waste but would increase costs for businesses and, ultimately, consumers. Avoiding this unnecessary additional tax is very welcome.
“A freeze in the rate of beer, cider and spirits duty, something we have continually called for, will also help avoid an additional squeeze on the hospitality sector.
“The Chancellor has taken some positive steps to reassure and support hospitality businesses during uncertain political and economic times. We are now calling on the Government to follow this positive Budget with continued support for businesses, as we close in on our withdrawal from the EU.”
With the ongoing people and skills shortages facing hospitality Jill Whittaker, Managing Director of HIT Training was also positive in her reaction to yesterday’s Budget and said: “We are delighted that the Chancellor has chosen to reduce the cost of apprenticeship training for non-levy payers, with the government now committing to a contribution of 95% and employers paying the remaining 5%.
“This means, for example, that the cost to an employer of training a commis chef or chef de partie reduces from £900 to £450, and for a team leader from £450 to £225.
“In the current economic climate any additional costs to businesses are tough, but the value that an organisation can get from well-trained employees delivers in so many ways – reduced staff turnover, increased productivity, less waste and improved job efficiency. We hope that today’s news will mean that SMEs – many of which stopped taking on apprentices when the Apprenticeship Levy was introduced – will come back to apprenticeships as an effective and beneficial way to train their staff and improve their businesses.”
BII CEO, Mike Clist was more than pleased with the Chancellor’s budget decisions related to pubs commenting: “We are delighted to hear that business rates have been cut by one third for many of our members running businesses with a rateable value of under £51k. This will provide much needed help to the most vulnerable pubs in our communities. In the longer term, root-and-branch business rate reform will be required to tackle the disparity between high street businesses and online retailers.
“The freeze on duty for beer, cider and spirits was unexpected, but very welcome, and will provide a much needed boost to our industry.
Bruce Ray, corporate affairs director for Carlsberg UK, was also clearly pleased with the freeze in beer tax saying: “Once again, The chancellor’s announcement of a freeze in beer tax is fantastic news. It will be warmly welcomed by brewers, their employees and the thousands of hard working publicans across the UK.
“Previous freezes in beer tax have supported investment into growth, maintenance and innovation in pubs and breweries – demonstrating the crucial social and economic contribution that our industry makes to the UK.
“This year’s freeze will support continued investment, the creation of new jobs, and ultimately benefit our beer-loving nation – Long live the local.”
So, generally speaking a positive reaction from many to the Budget yesterday, but many also stated the we are of course no clearer on dealing with the challenges of Brexit. Some questioned if Mr Hammond’s budget would even stand post Brexit, Downing Street was adamant stating that all the spending plans in this Budget would go ahead “irrespective” of Brexit.
Bosses and unions had to disagree, and so they did, CBI director general Carolyn Fairbairn said: “This was a rock-solid budget, bringing more treats than tricks for business.” With TUC general secretary Frances O’Grady saying: “Working people cannot be fobbed off again with promises of a better tomorrow that never comes.”
You can’t keep everyone happy all the time, but many in hospitality seem to have reacted well, at least initially.