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An Autumnal boost for Britain's pubs

On 06/12/13

Yesterday saw the Chancellor's Autumn Statement, though the weather was of course showing signs that Winter had well and truly begun. Amongst the various forecasts on debt and deficit, growth and employment, all important to the beer and pub sector, were a number of announcements that affected our industry.

For a sector that has grown accustomed to cowering in fear whenever successive Chancellors have stood up to speak, these could be nervy times. However, there now seems to be a degree of confidence around. The winds of change have swept through Parliament and pubs are now seen as an important part of the economy, helping to deliver growth and jobs.

Many of the announcements had already been trailed in the press and it was clear that something was planned for business rates. The BBPA has been campaigning for some time on rates, arguing that the cost to pubs was growing, and becoming unsustainable. Over the last couple of months this has been enshrined in the Better Rates for Pubs campaign, bringing together a coalition of interested parties.

The first key aim of the campaign, the extension of Small Business Rate Relief (SBRR) was duly delivered. This discount will now be available to pubs up to April 2014. As the name suggests, this only applies to those at the lower end, a 100 per cent discount for pubs with a rateable value of £6,000 and below, tapering to nothing at £12,000. This is worth up to £27 million to the pub trade.

More positive news came on rates with a 'cap' being placed on the rate at which the overall tax level went up. It had been due to increase by the retail price index (RPI), 3.2%, but instead went up by just 2%. This meant a £17 million reduction on the expected level for pubs.

The third element on rates was more unexpected. The Autumn Statement announced that Government would 'provide additional support to the retail sector through a business rates discount of up to £1,000 in 2014-15 and 2015-16 for retail properties (including pubs, cafes, restaurants and charity shops) with a rateable value of up to £50,000, and a 50% discount from business rates for new occupants of previously empty retail premises for 18 months'. Though it's still slightly unclear how this will work it is a massive boost to the bottom line of about 38,000 pubs. The relief for empty buildings removes a significant barrier to reopening pubs that lie dormant.

There was also a significant boost in terms of employment. The Government committed to remove national insurance contributions for employees below the age of 21. This is likely to benefit the pub sector, which already has in excess of 200,000 staff below this age, through lower costs. But it also opens up more opportunities for young people to get into the pub industry, and learn the valuable skills this industry can offer.

Other measures were announced affecting our industry. Moves to tackle alcohol duty fraud were confirmed, which will help to prevent fraudsters undercutting the legitimate trade. A ban on below-cost-selling was also included in the document, ensuring the cheapest products are taken off of shelves. There was further commitment to building exports and supporting the GREAT campaign, that will build the tourism industry.

All in all, the Autumn Statement delivered for the pub trade in some key areas. A Treasury graphic after the speech was delivered estimated the tax cut to pubs to be around 4.7%. The aforementioned growth and figures were also positive. An upturn in the economy should provide a much-needed boost in consumer spending that must help pubs.

But this was just a warm-up for the main event. For the Government to truly show its determination to help Britain's beer drinkers and pub-goers, licensees across the country and Britain's historic brewers then more action needs to be taken on beer duty. The weather is giving a hint George, a freeze is in order.


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