Budget 2013: The hospitality industry's reaction

- Last updated on GMT

Related tags: George osborne, Chief executive, Hospitality industry

The Budget contained good news for those selling beer, but what did the hospitality industry think about the 2013 Budget as a whole?
The Budget contained good news for those selling beer, but what did the hospitality industry think about the 2013 Budget as a whole?
Following the delivery of the Budget by Chancellor George Osborne earlier today BigHospitality caught up with some of the key organisations representing pubs, hotels and restaurants as well as individual operators for their reaction.

Osborne's so-called 'Budget for hard workers'​ saw him, to a jubilant Commons, state that he was scrapping the tax escalator on beer and cut beer duty by 1p to help 'responsible drinkers' continue to enjoy a pint and safeguard the future of pubs. 

But while the pub sector breathes a sigh of relief, those selling wine and spirits are less happy at seeing 10p added to the price of a bottle of wine and 53p on the price of a litre bottle of spirits and disappointment also that business rates were not even discussed. 

Find out what the industry thinks on some of the key factors for the industry, such as the introduction of the Employment Allowance, in our reaction round-up. 

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Ufi Ibrahim, chief executive the British Hospitality Association​ (BHA): “We welcome the prospect of the Employment Allowance from 2014 as the £2,000 National Insurance cut will help the large majority of our hospitality employers who are small and micro businesses.  We also welcome the further drop in corporation tax. But you have to make the profits first and hospitality industries are being challenged by rising food and energy costs. At a time when the UK economy needed a budget focused on growth, George Osborne missed the opportunity to get behind the hospitality industry.  Again. His job creation boast is not a surprise to us – the hospitality industry has been one of the biggest jobs creating sectors in the last three years.”

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Brigid Simmonds, chief executive of the British Beer and Pub Association ​(BBPA): "This is absolutely brilliant news, and it will make George Osborne the toast of Britain’s pubs today. By cutting the tax on beer, he has moved to boost jobs in Britain’s pubs at a time when it is most needed. In also abolishing the beer tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s’ beer the most heavily taxed in Europe. This will protect thousands of jobs this year, and will allow us to create many new jobs in this brilliant industry. I hope this heralds the start of a long term change that recognises the benefits of beer and pubs, for the economy, and for society.”

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Kate Nicholls, strategic affairs director of the Association of Licensed Multiple Retailers​(ALMR): “The Chancellor’s scrapping of the beer duty escalator and cut in taxes is good news for Britain’s pubs and bars – and long overdue. George Osborne said he wanted to back sectors which are global successes and free up major employers – and that is precisely what we represent.  Britain’s pubs and bars generated 1 in 8 of all new jobs last year, we’ve delivered 8 per cent growth year on year in GDP. This goes some way to re-dressing the balance but there is a still a long way to go level the playing field with the supermarkets and across all products. With 70 per cent of alcohol now sold and consumed away from the responsible, supervised environment of the pub, we need to make sure that this is the start of a more healthy dialogue about the positive role pubs can play."

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Miles Beale, chief executive of The Wine and Spirit Trade Association​ (WSTA) said: "This is bad news for the UK wine and spirits sector, with year on year duty increases hitting consumers and businesses hard. It makes little sense to single out beer, particularly as there is a legal precedent to suggest Government is unable to do so. If this was designed as a measure to support pubs it seems misplaced: over 41 per cent of drinks sold in pubs are wine and spirits, contributing £9.4 billion per year.  The Chancellor’s decision ignores the growing value of the English wine industry and the UK spirits industry, which accounts for 18 per cent of all jobs in the EU spirits industry.”

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Robert Downes, spokesperson for The Forum of Private Business​, said: "Ask any small businesses what they wanted to see from this Budget and many will have said: ‘action on business rates’. We said before the Budget government couldn’t keep clobbering businesses with hike after hike, and unfortunately we haven’t seen that sentiment acknowledged today by Mr Osborne. Business rates have risen so much in just a few years they are the number one enemy to many small firms, and we believe are a big part of the problem behind the problems with our high streets too. It’s disappointing to see no action here – it was the obvious way to relieve pressures and is a missed chance for quick and easy relief for business.”

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Robin Hutson, chairman and chief executive of Home Grown Hotels​: "If the employer’s NI goes down then that has a very direct impact on our bottom line. We employ a couple of hundred people in the UK and that would help. You employ as many people as the business needs whether or not there are incentives, however anything that they can do to help, as long as there is not half a tonne of red tape attached to it, would be welcomed. We have had a pretty good year anyway and the better businesses have fared OK. In my book, there is a bit of distinction between what I read in the newspapers and what is happening on the ground – we are seeing good levels of occupancy and spend. There are examples of other countries where the governments are more interested in their tourism industries and encouraged that by cutting VAT. I would love to see UK VAT at a lower level, realistically do I believe it is coming? – probably not.”

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Steve Lowy, founder of Umi Hotels and Umi Digital,​ said: "I think that is encouraging for businesses our size alongside some of the other smaller business related incentives such as EMI and EIS from previous budgets. I think it could also free up capital for small businesses generally to employ that extra staff member which could be very helpful to the economy as a whole. From a general tourism point of view, I am disappointed that APD has not been looked at. That, combined with no expansion of Heathrow could really cause issues for the UK as a destination of choice and London could lose its hub status with airlines and consumers choosing cheaper landing destinations which have a great capacity in regards destinations serviced and frequency of flights. This in turn could have a large knock on effect on the hospitality industry in the UK." 

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Nigel Wright, chief operating officer of managed pub & bar group TCG​, said: “It’s welcome news that we will be cutting beer prices for our customers. Consumer confidence is fragile and we were already looking at ways we could absorb part of the expected duty increase in some of our local and community pubs rather than pass it on in full. It sounds as though the Chancellor has listened to the pub trade’s concerns that the role of pubs as an important community asset, as well as a major employer, needs to be supported.” 

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Andy Laurillard of restaurant group Giggling Squid Group said: "The reduction in corporation tax will make expansion that much easier - giving us more profit to reinvest and less dependent on the bank. The rise is the income tax threshold to £10K will benefit our many part-time workers and hopefully, it will help encourage people on benefits to seek employment in the catering sector, which still struggles to recruit enough good people. The cancellation of the 3p fuel escalator duty will help suppliers' keep food costs, which have been rising sharply, down and will be to the benefit of our customers as we will be able to hold down prices. The real test of the Budget is how it is viewed by the international money markets. For the Giggling Squid it's vital that George Osborne's policies strengthens the pound.  A fall in sterling causes food costs to rise - which is bad very bad news for the Thai restaurant trade, which is reliant on imported ingedrients like coconut milk, rice, lemon grass and fresh herbs not produced in the UK. 

Survey

Will the 2013 Budget make things easier for your business?

  • YES - The Employment Allowance and drop in Corporation Tax will help

    32%
  • NO - George Osborne missed a number of more important issues such as business rates and VAT

    68%

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