The boss of pubs group Fuller’s has warned Rachel Reeves ‘we can’t tax ourselves to victory’ as the beleaguered industry pleads for help in the Budget.
Simon Emeny said he was ‘frustrated’ by the lack of clarity and wants Reeves to avoid imposing ‘further punitive financial measures’ in this month’s Autumn Budget.
He criticised Labour’s ‘lack of a clear plan’ to deliver economic growth and said many struggling pubs were adopting shorter opening hours or opening on fewer days.
The Chancellor is reportedly mulling another hike in alcohol duties, which senior figures fear would ‘kill the industry’.
Pubs and other hospitality firms are already reeling from Reeves’ £25 billion raid on employer national insurance, which has made it more expensive to hire staff.
Emeny told the BBC: ‘The Chancellor’s Budget from last year has really impacted the profitability of the sector.
Speaking out: The boss of Fuller’s says he is ‘frustrated’ by the lack of a clear plan for growth from Rachel Reeves
‘Costs have increased materially from last year so many businesses look at opening hours – so you quite often see pubs closing early, you see pubs closed in the early part of the week.
‘Ultimately that is not good for the Chancellor. The Chancellor needs to raise tax revenues. If pubs are closing or are closed for longer hours that’s impacting the revenues that she gets.
‘We do look carefully at the Budget in two weeks’ time and have an expectation that there will be some measures from the Chancellor that will drive the economy back into meaningful economic growth.
‘We can’t tax ourselves to victory.’
Hospitality braces for Budget
Pub groups across Britain have been battling higher energy bills, taxes, wages and employer national insurance contributions.
In last year’s Autumn Budget, the Chancellor increased duties by 3.6 per cent, which put the average bottle of wine up by around 54p, and gin by around 32p.
On Wednesday, Emeny said he hoped the Chancellor had ‘heeded the arguments and proposals articulated by the hospitality sector’ ahead of the Autumn Budget.
He said the Government needed ‘new ideas, new thinking’ if it was to live up to its ambition to grow the economy.
Emeny added: ‘The country needs ambitious and innovative ways to drive sustainable economic success.’
The executive chairman warned that Fuller’s had already taken an £8million hit from last year’s Autumn Budget tax hikes to employer national insurance contributions, which came into effect in April.
The number of British pubs and bar businesses appointing liquidators or administrators rose to 449 in the first 10 months of the year, an analysis for City AM showed earlier this month. This was the highest number for more than two decades, according to figures compiled using insolvency disclosures.
In September, an open letter from the Scotch Whiskey Association, UK Spirits Alliance, Welsh Whisky Association, Whisky Guild and Drinks Ireland urged the Chancellor not to increase the rate of excise duty on alcohol until the end of the current parliament.
Last week, Wetherspoon warned it was becoming ‘more cautious in its outlook’ as the industry braces for further tax hikes and rising minimum wages at the Autumn Budget.
Fuller’s unveiled its half-year results on Wednesday, reporting an adjusted pre-tax profit of £22.5million, up from £17.6million a year ago.
Revenue and other income reached £207.5million in the period ending 27 September, up from £194.1million a year ago.
Drink like-for-like sales increased by 6.5 per cent, while food and accommodation like-for sales rose by 2 per cent and 3.3 per cent respectively.
It said Christmas bookings this year were 16 per cent higher than by the same point a year ago.
The group’s interim dividend increased by 6 per cent to 7.85p, up from 7.41p in the first half.
Fuller’s said it was ‘well placed for appropriate acquisition opportunities’ in the future.
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