![Bar worker pouring a pint](https://media.guim.co.uk/15c422a90acfc1d826247735b84b229f5aa6854d/0_0_4256_2554/1000.jpg)
The chancellor has been accused of producing a “cut and paste” budget that fails to provide the tax changes needed to protect pubs and restaurants.
UK Hospitality, the trade body for the sector, said Jeremy Hunt’s budget had done little to “bridge the sector through a difficult period”, and failed to reduce the escalating costs businesses now face.
Allen Simpson, deputy chief executive of the body, said: “I listened to the budget waiting for the support the industry needs, and it didn’t come; it was a cut-and-paste from last time.
“He’s pulling levers that he’s pulled before, and didn’t work, we believe that the levers he needs to pull are the levers which support costs for businesses.”
The chancellor announced that the freeze on alcohol duty would be extended until September, a change that is expected to save 3p on a pint of beer.
But UK Hospitality and businesses had been calling for a reduction in VAT to 12.5% for hospitality businesses, as well as a 3% cap on business rates when they rise by an expected 6.7% in April.
More than 6,000 hospitality venues closed due to cost pressures in the 12 months up to December 2023, according to the Hospitality Market Monitor.
Stosie Madi, co-owner of the Parkers Arms pub in Lancashire, said businesses were relying on a VAT cut, and the lack of action could lead to higher prices for consumers.
She said: “He’s not reduced VAT. That’s the biggest thing that could help hospitality, because hospitality is on its knees because all the costs are going up.”
Chris Jowsey, chief executive at Admiral Pubs, said: “The industry reckons it’s worth about £114m in a year. The problem is we pay £15bn in taxes. So it’s a welcome nose towards pubs, but it’s not really sufficient in that sense.”
Retailers were also disappointed at Hunt’s failure to reduce business rates, which will increase in line with the CPI inflation rate in April.
Helen Dickinson, the chief executive of the British Retail Consortium, which represents most major retailers, said: “How can a whopping 6.7% tax rise in April be justified, when the chancellor himself is saying inflation is forecast to be nearer 2%?
“The cost of living crisis has taken a toll on businesses and households. Consumer confidence remains low and retail sales volumes in 2023 were the lowest in four years. Yet the chancellor has done little to promote growth and investment, instead hindering it with the business rates rise in April.”
There was also anger that the government did not revive tax-free shopping for overseas tourists, a relief it scrapped in 2021. More than 500 business leaders, backed by the British Chambers of Commerce and the Federation for Small Businesses, wrote to Jeremy Hunt asking him to reinstate the tax break.
However, Hunt’s revelation that the pharmaceutical company AstraZeneca would be investing £650m into two new facilities in Liverpool and Cambridge, thanks to government support for the life sciences sector, was warmly received.
This includes £450m of investment in a manufacturing site at its research facility in Speke, Liverpool, which will support research, development and manufacture of vaccines at the base. There will also be £200m to build a new facility at a life sciences technology cluster in Cambridge.
Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, said: “AstraZeneca’s investment shows that if we get the policy environment right, we can reinvigorate medicine manufacturing in this country, creating new jobs and prosperity across the country.”
Elsewhere, IATA director general Willie Walsh was highly critical of the chancellor’s decision to raise air passenger duty on some flights, accusing him of breaking a promise he made in September not to raise taxes on flying.
The changes mean air passenger duty increases by 10% on premium economy and business class flights from April 2025. The rise will add £66 in tax on a businesses class fare from London to New York, meaning the fare could cost up to £647 when the changes come in.
Walsh said: “It’s a shortsighted cash grab of a government that has run out of ideas, competence and basic integrity.”