The chairman of JD Wetherspoon today blamed the Bank of England for stoking inflation by inventing money to support the economy.
As his budget pub business fell to a loss of £26 million for the year, Tim Martin, said: “The government is reported to have spent over £400 billion on Covid measures, around nine times the annual defence budget. The expenditure has been financed by the creation of "new money" by the Bank of England, which has led to significant inflation and higher taxes.”
A critic of government Covid policies, Martin says trade is now back to close to pre-pandemic levels.
He added: “Draconian restrictions, which amount to a lockdown-by-stealth, are, of course, kryptonite for hospitality, travel, leisure and many other businesses. The company is confident of a strong future if restrictions are avoided. The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy."
His business made a profit of £52 million in 2020 before Covid struck. He said reports that ‘Spoons has had staff and supply issues were wide of the mark.
"Contrary to some reports, the company has a full complement of staff and is fully stocked, with some minor exceptions,” he noted.
Martin did concede that labour costs are high, partly due to Covid-related absences.
The shares are down 38% this year and lost 6p to 820p today.
Wetherspoon now has 859 pubs, having lately opened four new pubs and closed or sold six others.
Martin returned to one of his favourite topics, the disparity on VAT between pubs and supermarkets.
He said: “Supermarkets pay virtually no VAT in respect of food sales, whereas pubs pay 20%. This has enabled supermarkets to subsidise the price of alcoholic drinks, widening the price gap, to the detriment of pubs and restaurants. Pubs also pay around 20 pence a pint in business rates, whereas supermarkets pay only about 2 pence, creating further inequality. Pubs have lost 50% of their beer sales to supermarkets in the last 35 or so years. It makes no sense for supermarkets to be treated more leniently than pubs, since pubs generate far more jobs per pint or meal than do supermarkets, as well as far higher levels of tax.”
