The plight of pubs is set to get worse after Rachel Reeves’s Budget, according to 82 per cent of landlords. Before The Chancellor’s statement last week pub bosses said they feared for survival with 9,000 pubs facing closure in the next 12 months.
But measures announced in last Wednesday’s Budget, including a tiny cut in tax on draught beer and a 3.65% rise in tax on spirits, have sent landlords’ confidence plummeting with just 1% of publicans expressing optimism for trade in the coming year.
Before the budget 58% of pubs thought the outlook for their business was negative – 15% were positive. Now 82% of pubs view their business prospects as negative, with 1% expressing optimism for the coming year. That is a 24-percentage point increase.
In the Survation survey for the UK Spirits Alliance (UKSA), which represents 280 British distillers, pub landlords said the 1p off a pint announced by Chancellor Rachel Reeves in her budget would make no difference to their chances of survival. 88 per cent of bar owners and publicans said the one-penny cut will have no impact as they fight to keep their doors open amid rising taxes and the costs of living for their customers.
Neema Rai, a spokesperson for the UKSA, said: “We waited patiently for the new government to come up with the support they had hinted at for so long but now we can see the reality is just a gimmick on draught drinks and a massive increase on spirits. It’s a blow to publicans and British distillers and will hit the pockets of working people hard.
“In reality we need to support our pubs or we will face neighbourhoods that are increasingly full of chains and only those that can afford to be in it. Owner-managed independent pubs can lie at the heart of the community and act as second homes to pensioners and those on their own. We must make pubs more affordable and accessible.”
Megha Khanna, a spokesperson for the UKSA, said: “The hike in spirits duty is going to impact the huge number of customers who come to a pub for a G&T or a cocktail. Pubs are more than pints and this is going to hammer our trade. As for trying to make people think that a 1p cut off a pint is some sort of bonus, it’s incredibly patronising – it’s a gimmick which won’t hide the fact that thousands of pubs are on the brink.
“The Chancellor had the opportunity to heed concerns but instead this will ultimately cost jobs, reduce investment and damage growth . Many publicans and distillers had hoped the new Labour government would support their business, not least with Keir Starmer declaring ahead of the General Election that he would ‘back Scoth Whisky to the hilt”.
After the chancellor added a 3.65 per cent hike in tax on sprits in her Budget 77 per cent of those in the pub trade who were surveyed said this measure alone would worsen their plight. Fewer than nine per cent of publicans said the Labour Party supported them.
One publican told researchers the budget was: “A total joke” adding “We are all slaves to the government”. Another said it would lead to the “Extinction” of their small business. Other publicans branded the Chancellors plans as “Business hating”, “naive” and “misguided”.
Under the last Conservative Government the then chancellor Jeremy Hunt increased tax on spirits by 10.1 per cent in his 2023 Budget.
Distillers and publicans had hoped Sor Keir Starmer would support them by reversing the record increase in duty. But Rachel Reeves increased spirits duty in line with the Retail Price Index.
