BRITS face losing a third of pubs if Labour fails to ignore calls from boozers for “immediate intervention”.
A staggering 35% of British inns risk closure without help from Rachel Reeves’ Autumn Budget, the British Institute of Innkeeping (BII) has warned.
The trade body said just one in three hostelries was now profitable as a result of tax hikes introduced by the Chancellor in April.
The report found three quarters of its 13,500 members – some 74% – had been forced to slash hours, while 70% had to let staff go.
The BII is now calling on Reeves to slash business rates, reduce VAT to 10% for pubs, reverse the hike in employers’ National Insurance Contributions and bring in financial incentives for boozers to hire under-25s and out-of-work Brits.
Earlier this year, businesses had to pay a higher rate of employer National Insurance contributions (NICs) of 15% from 13.8%.
It said the policies would encourage pubs to increase investment and staff hours and hire more employees in a boost for the economy.
Steve Alton, chief of the BII, said: “Since the Covid pandemic, government has recognised the huge value of our pubs, with the Prime Minister recently stating that ‘when our locals do well, our economy does too’.
“This recognition must now be matched with urgent action at the Budget to drive local economic growth by reducing the unfair tax burden.
“This will create skilled jobs and allow pubs to continue to serve their communities.
“Without it, many simply will not survive.”
The trade body’s report added: “The BII has urged the Chancellor to seize the opportunity to support and invest in the great British pub, stating that closures would result in lost jobs, lost tax revenue and immeasurable damage to communities in every town, village and high street across the UK.”
It is the latest warning ahead of the Budget on November 26.
Figures from UK Spirits Alliance published this week said the equivalent of 11,000 pubs across the UK could close if Labour raises costs.
The alliance is asking for a freeze on excise duty following a 10% hike under the Tories.
Meanwhile, Wetherspoon boss Sir Tim Martin told The Sun soaring wage bills and taxes are piling pressure on pubs to raise prices.
The head of the no-frills boozer said a 10% pay rise alone adds about 15p to the cost of a pint in a pub, compared with just 1.5p in a supermarket.
Sir Tim said that wage increases hit pubs ten times harder than grocers because employing staff makes up a massive chunk of a pub’s costs.
It comes as Chancellor Rachel Reeves is expected to announce the pay boost in the autumn budget.
The increase is set to come as part of plans to improve living standards.
The rise is not set in stone, but is likely to be confirmed in the budget later this month.
If confirmed, the move would lift the average salary for a minimum wage worker on a 40-hour week from £25,376 to £26,416.
Plus, if Reeves ploughs ahead with a fresh tax raid on booze punters could face up to 50p hike on their favourite tipple.
Last year, drinkers faced a 3.6% hike, adding 54p to a bottle of wine and 32p to gin.
But this year, Chancellor Rachel Reeves could hike alcohol duty by 4.5% from February 1.
Alcohol duty is usually updated each year using the Retail Price Index (RPI) for inflation from the previous September.
But industry leaders are urging the government to freeze duty rather than raise it by 4.5% at the November 26 Budget.
Under the proposed changes, a bottle of whiskey would rise by 50p.
Hospitality in crisis
THREE in ten pubs say they may not survive another year if costs increase – the equivalent of 11,000 pubs across the UK, a survey shows.
Most (98%) landlords and hospitality businesses say the government is failing to back pubs or support the sector.
The sector has been hit by increases to employer national insurance contributions with warnings about the minimum wage bumping up salaries.
It marks a huge difference from 12 months ago when 63% of those surveyed didn’t associate Labour with backing boozers.
The figures come from UK Spirits Alliance who are asking for a freeze on excise duty following a 10% hike under the Tories.
Landlord Paul Mitchell, who runs the Dinton Hermit near Aylesbury, Buckinghamshire, said: “Pubs are closing at an alarming rate up and down the country.
“Since the last Budget, thousands of jobs have been lost across the hospitality sector and it simply isn’t sustainable.
“It’s little wonder that Labour has lost trust amongst publicans.
“If the Chancellor wants to support the sector, a complete freeze on excise duty for spirits would be a good start.
“Pubs are more than pints; spirits generate a higher profit margin and offer choice to our customers.”
Meanwhile, UKHospitality has warned that as many as 111,000 jobs could be lost across restaurants, pubs and bars by 26 November.
Kate Nicholls, chair of the group, said: “The impact of the last Budget was devastating.
“Business closures, job losses, curtailed investment, consumer price rises and lost opportunities for young people are all direct impacts of the choice made to inflict £3.4billion of additional annual cost on our sector.
“Without action, we will see these impacts continue and intensify.”
