One of the loudest cheers of the Autumn Budget from Rachel Reeves came from the announcement that the price of a pint was set to fall thanks to the freezing of alcohol duty, but that might not be the case.
A major pub chain has warned that Labour’s national insurance hike could see the cost of a pint increase.
Pub group Fullers has warned that the incoming national insurance contribution hikes could leave it with a “£8 million hit”.
Simon Emeny, chief executive of pub group Fullers, warned: “We won’t be able to afford to just take the £8 million hit to the bottom line, so there will be price increases and it will be inflationary.
“Our customers want a high level of service so it’s imperative we don’t compromise on that.”
He warned that although it was too early to tell how exactly businesses would be affected, he believed that some were already reigning in spending due to the panic of what might be coming.
When asked by The Sun how much a pint might increase he said: “It won’t be as low as 5p, the increase across the industry will be more like 10p.”
Businesses were also hit by an increase in the minimum wage, adding more outgoings to the balance sheet.
For those over 21 years of age, the minimum wage, known as the National Living Wage, will increase from £11.44 to £12.21.
Emeny added: “For a government that was supposed to be stimulating economic growth, it will do the exact opposite.”
The chain’s chairman Michael Turner also pulled no punches in light of the Chancellor’s Budget.
Turner said: “The Chancellor’s actions are a direct attack on those labour-intensive industries that are the lifeblood of our economy, whilst leaving the large City institutions, that can afford to pay their share, almost completely untouched.
“The unintended consequences of these actions will be to drive inflation higher, put pressure on wages, and will drive many businesses to the wall.”
The criticism comes after brands such as Premier Inn and Slug & Lettuce also blasted Labour’s plans, which they believe will leave the industry with billions of additional costs.
They, along with others, have lent their names to an open letter calling on the government to provide an exemption for lower band taxpayers who work fewer than 20 hours per week to support venues that hire student bartenders and other flexible workers.
Organised by trade group UKHospitality, the letter stressed: “The changes to the NICs threshold are not just unsustainable for our businesses, they are regressive in their impact on lower earners and will impact flexible working practices which many older workers and parents rely upon.
“Unquestionably they will lead to business closures and job losses within a year.”
Chief Secretary to the Treasury Darren Jones insisted the government was looking out for small businesses and working people.
He told the BBC: “There are measures more broadly in the Budget which we think are good for business, and good for growth, and good for the economy.”
