Setting out plans in the Commons earlier today, Osborne said he would 'reward work' and would 'unashamedly back business and aspiration', while offering to help a range of British industries. However, the hospitality industry was not one he mentioned would benefit.
The biggest boost to business was the announcement that corporation tax on company profits would be cut from 26 per cent to 24 per cent, double the reduction previously announced, which Osborne said would improve Britain's competitiveness among foreign investors.
There were also plans to make savings in administration costs for businesses and make enterprise loans available to young people looking to start up their own companies as part of the Chancellor's move to kick start the economy.
However, despite previous calls to reduce the VAT rate for the hospitality industry to 5 per cent there was no move to change it. The Chancellor also refused to back-track on his predecessor's introduction of the alcohol duty escalator which means duty will continue to rise by 2 per cent above inflation again this year.
Some of the key changes affecting the industry are:
- There will be no changes to the alcohol duty escalator. Alcohol duty will continue to rise at 2 per cent above inflation, so will rise by 5 per cent from April.
- There are no planned changes to fuel duty.
- Duty will be increased on takings from gaming machines. It will be set at 20 per cent on net takings, or 5 per cent for machines where winnings are low.
- A consultation on VAT to close loopholes on VAT on areas such as soft drinks and hot takeaway food to be held. Rates currently differ for example on takeaways vs takeaway food from supermarkets and some sports drinks are exempt compared with other soft drinks.
- Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle are to become broadband super-connected cities.
- All-day trading is to be permitted for eight Sundays starting from 22 July to coincide with the Olympics.
- The Government is exploring the idea of Enterprise Loans for young people to help them start up their own businesses.
- Unemployment is set to peak at 1.67m this year