Industry trade bodies react to the UK Budget statement 2021

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The 2021 Budget Statement delivered yesterday (3 March 2021) by the Chancellor of the Exchequer has elicited the following reactions from the UK’s main gambling, hospitality, pub and night-time industry trade bodies.

Betting and Gaming Council welcomes Chancellor’s Lifeline for High Street and Hospitality Businesses

The BGC has welcomed the Chancellor’s decision to extend the furlough scheme until September, extend business rates relief and introduce grants for hard pressed high street businesses and hospitality.

Betting and Gaming Council welcomes Chancellor’s lifeline for high street and hospitality businesses

Standards body the Betting and Gaming Council (BGC), which represents the UK’s betting and gaming industry including betting shops and casinos, has welcomed the Chancellor’s decision to extend the furlough scheme until September, extend business rates relief and introduce grants for hard pressed high street businesses and hospitality.

These steps will help to support the 44,000 people who work in the retail betting shops and land-based casinos.

Since the start of the year, all betting shops and casinos have been required to close without the ability to generate any revenue. The BGC said that even with partial relaxation of restrictions – not expected until 12 April at the earliest for betting shops and 17 May for casinos – many retail, leisure and hospitality businesses would have struggled without additional longer-term support from the Government. The BGC pressed the Government to safely reopen businesses as quickly as possible, data permitting.

The BGC said the added flexibility provided by extending furlough to September will help businesses get back up and running whilst retaining control over their biggest cost, which is staffing.

The decision to extend business rates relief will remove a major financial pressure on businesses that have suffered a significant loss of income during the pandemic.

BGC members in 2020 paid nearly £4 billion in taxes, contributed £350 million to horse racing and £120 million to the UK tourism industry through international visitors and their spend.

Michael Dugher, BGC chief executive said:

“The extension of the furlough scheme and new grants for businesses are strongly welcomed by the tens of thousands of people who work in high street betting shops and land-based casinos. Without the continued support from the Chancellor, many of these businesses would have struggled to survive.

We have already seen over 5,000 jobs lost and 375 businesses closed since the start of last year.

The decision to extend the business rates relief will be welcomed by many of our member companies who have not been able to open properly for nearly a year now.

Our industry will continue to play it’s part in the national effort to combat covid, supporting our local communities, and we look forward to contributing to the economic recovery”.

UKHospitality reaction to the Chancellor’s Budget statement

UKHospitality Chief Executive Kate Nicholls said:

“The Chancellor has listened to the concerns of the hospitality sector. Details are yet to be pored over but it looks like crucial support will help businesses at a critical time.

The Chancellor has announced support to help our sector get back up and running, now it is vital that the Government sticks to its date of June 21st for a full reopening of the sector. Delay would see more businesses fail, more jobs lost and undo much of the good work the Chancellor has done to date.”

On VAT:

“An extension of the 5% VAT rate was absolutely crucial for hospitality businesses. Confirmation that the Governmentwill provide support for a full year will bring peace of mind to the sector. UKHospitalityhas been pushing hard for this and it was critical that it was delivered today.

While it would have been better to have extended the 5% rate further, it is now vital that the Government looks at introducing the interim rate for hospitality on a permanent basis. It would be a positive legacy of an otherwise dreadful year for our sector. A permanent reduced rate of VAT for hospitality would redress the unfair tax imbalance that our businesses have faced for too long and make us internationally competitive.”

On business rates:

“It is great that this fixed cost has been eliminated during the recovery and is heavily reduced for the rest of the financial year. It will give some much-needed breathing room for businesses as they prepare to reopen, though the cap will impact some larger businesses. Not all businesses will be able to reopen swiftly, it will take them time to get up and running. They will be burning through meagre cash reserves as they do so, so this extra flexibility is going to crucial in ensuring as many as possible stay alive.

The forthcoming revamp of the rates system then has to deliver a wholly new system of business tax that no longer unfairly penalises our sector.”

On grants:

“The previously announced grants are a welcome boost. The priority now is making sure that these grants find their way to the businesses that need them as quickly as possible and that interest rates are capped. It is critical that Government makes clear that EU State Aid rules do not apply to these grants.”

On furlough:

“The extension of the scheme brings stability and peace of mind to employees after a dreadful year of uncertainty. There is still a worry that it will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet, though.”

On duty:

“Scrapping any increase on the rate of alcohol duty is a pragmatic step. Additional costs were the last thing that businesses needed at the minute. As we emerge from the crisis, we hope that the Government will seriously consider a separate rate, long pushed for by this sector, for on-trade alcohol.”

On the recruitment bonus:

“Increasing the recruitment incentive will be a major boost in helping the hospitality sector rebuild once the crisis has passed. The doubling of the apprenticeship incentive will be a major boost for our sector’s recovery and aids our commitment to upskilling people across the country. Driving the economic recovery of the UK will be dependent on getting people back into work and this will be a huge help. The hospitality sector is going to be a key weapon in the country’s arsenal if it wants to rebuild the economy and tackle unemployment.”

On investment relief:

“The commitment to encourage investment, with 130% tax reliefs, is very encouraging as we re-build and re-generate high streets and local communities.”

On rents:

“The biggest gap in support remains the outstanding sector rent debt. We need the Government to announce an extension of the moratoria at the earliest opportunity and work with industry to establish a landing zone to resolve this £2bn millstone around our recovery.”

BBPA Budget response – Good news for pubs in the short-term, long-term stimulus still needed to secure the great British pub 

BBPA responds to Chancellor’s Budget worth over £1.5 billion for brewers and pubs 

Responding to the Chancellor’s Budget speech, Emma McClarkin, Chief Executive of British Beer & Pub Association, said:

“We welcome the Chancellor’s announcement of continued support for the devastated pub sector in the form of additional grants, as well as extensions to the job retention scheme, 5% hospitality VAT rate and business rates holiday.

The new grants are worth £400 million for pubs and will go some way in helping many of them survive through to the time when they can reopen and operate viably. It is, however, crucial that the Government ensures all pubs benefit, including those that are part of a group, by removing the current State Aid cap.

The extension of the job retention scheme until September will help save thousands of pub jobs. Worth £700 million to our pubs and brewers, it gives the sector time to reopen and rebuild trade before bringing all staff back, which would otherwise be too costly and unviable whilst still facing trading restrictions until end of June.

It is imperative that the Government allows pubs to operate without restrictions as planned from 21st June. This will give them the best chance to get back on their feet and serve their communities.

Extending the 5% VAT hospitality rate until September and at 12.5% thereafter is most welcome. We calculate it is worth £485 million to pubs. With all pubs having been closed for so long, the lower VAT rate has been of limited benefit so far, tens of thousands of pubs will not benefit from this until they reopen on 17th May at the earliest and then still at reduced capacity. However, wet led pubs will be especially disappointed again that the reduction will not apply to all beverages so they too can benefit from this.

We campaigned hard for an extension of the business rates holiday and the Chancellor announced a 100% cut on rates until June and up to a 66% cut for the following 9 months. This is good news, but the proposed cap will mean many pub businesses will not benefit fully from this. We await to see more detail.

Having called for a cut in beer duty and being a staunch supporter of the Long Live The Local campaign, a beer duty freeze will be seen as much needed short-term relief for the sector. However, the Chancellor has only partially listened to the 500,000 campaign supporters who signed the petition calling for a cut in beer duty. We now hope the Government will use the ongoing Alcohol Duty Review to cut beer duty to support our brewers and pubs and level the playing field with other brewing nations. The Government must support and promote Britain’s extraordinary pub and brewing sector in the way other Government’s support their domestic industries.

Overall, this is a good Budget for pubs and breweries in the short term, reflecting just how vital they are to the social, cultural and economic fabric of our communities.

However, this is just the start of the journey on the hard road to long-term recovery for our sector. The Chancellor has made it clear today he recognises the vital role local pubs play in their communities. Now he must continue that commitment by ensuring Britain’s pubs and breweries are supported in the long term. This should start by extending the VAT cut on hospitality to all drinks until at least the end of the year. We also need a fundamental reform of VAT, business rates and beer duty to ensure that the thousands of pubs and breweries across the UK can thrive and help drive the social and economic recovery we urgently need.”

NTIA Reaction to the Budget Announced by Chancellor

“In our pre-Budget survey, nearly 80% of nightlife businesses said this Budget was critical to their survival. Despite this, the Budget is yet another statement from the Chancellor that has failed to recognise the need for additional support for the night time economy sector.

We welcome the extension of VAT and rates relief, and that more money is going to hospitality and the Culture Recovery Fund (CRF). But both of these interventions again reveal the Chancellor’s inability to comprehend the specific challenges faced by night time economy businesses, such as nightclubs, casinos and bars, many of which have been entirely unable to open during the pandemic and face higher costs relative to wider hospitality. With no meaningful expansion to CRF eligibility, and no bespoke support for our sector, we are once again left with a package totally incommensurate with businesses’ costs – including spiralling commercial rent arrears. The loan solutions outlined by the Chancellor just aren’t good enough for businesses that are already overburdened with debt.

It is also welcome that furlough has been extended and SEISS expanded, but it’s unacceptable that the Chancellor continues to let down other freelance workers in our sector who have missed out on support to date. Surveys have revealed two thirds of nightlife freelancers have been unable to access support, and today’s expansion – while welcome – will only make a small dent in this figure.

I am also disappointed that the Chancellor didn’t take this opportunity to introduce a Government-backed insurance scheme for events this summer. Our world-leading festivals are at the heart of the UK’s cultural life – but because of the announcement today, so many events will be needlessly cancelled, or postponed to 2022.

While the roadmap announcement gave hope to our sector last week, the Chancellor is now at risk of snatching defeat from the jaws of victory. With the money spent on support to date, it is ridiculous that many nightlife businesses may now fall at the final hurdle. The blame for this unnecessary personal hardship, and damage to the wider economic recovery, will fall at the Chancellor’s feet, unless he acts to ensure that proportionate sector specific grant funding is available immediately for night time economy businesses.

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