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Source: create jobs 51, Shutterstock
Summary
- Chancellor Rishi Sunak announced relief measures for the hospitality sector in Budget 2021.
- Pubs and breweries stocks responded positively to announcements; most stocks moved up.
- However, industry bodies have expressed their displeasure with the new grants and measures.
Chancellor Rishi Sunak’s spring budget presented on 3 March to boost the ailing economy that is struggling to overcome the fallout of the Covid-19 pandemic has not found much acceptance from the British pub owners.
As per the major business owners, the slew of measures announced to help the hospitality industry recover from the Covid-induced slump did not have any remedies specific to the pubs and breweries and concerns like mounting rent bills, other measures.
Also read: Pubs and Bars Call for Government Support Amid the New Social Distancing Norms
However, major stocks in the sector reacted positively to Sunak’s announcements. Weatherspoon (JD) Plc (LON: JDW) was up 6.02 per cent and had closed at 1,321.00 pence after opening at 1,283.00 pence. Mitchells & Butlers Plc (LON:MAB) was up 4.87 per cent and had closed at 312 pence after opening at 293 pence. Marston’s Plc (LON:MARS) was up 3.14 per cent and had closed at 98.50 pence after opening at 96 pence.
Industry body Campaign for Pubs noted that Sunak’s announcements did not provide relief to all sub sectors in equal measure. It said that for pubs, whose earnings are generated from alcohol sales, would not benefit from an extended tax cut that was announced on food and overnight stay.
Also read: UK Pubs December Sales to Be 90 Per Cent Low Than Normal
Sunak had announced there would be no increases in taxes on Scotch whisky, wine, cider, and beer. For the hospitality and tourism sectors, Sunak extended a reduction in value-added tax to 5 per cent. The reduced VAT, which would be extended for six months for the sector, would cost the Treasury £5 billion.
Sunak had slashed VAT from the usual 20 per cent rate last July and would continue through September, after which an interim rate of 12.5 per cent would be applicable till April 2022.
Also read: Successful Vaccination Drive and Wetherspoon’s Call for UK Pubs Reopening
Campaign for Pubs’ chairman Paul Crossman said small breweries and pubs would not be able to avail income support measures. Greene King’s Nick Mackenzie said after this month, landlords would be free to evict tenants for not paying rents as the rules would expire, and this issue has not been addressed in the budget.
Craft beer trade body Siba also criticised the lack of specific relief measures for a sector that was once thriving and said that the sector misses out on VAT cuts, targeted relief measures and relief from business rates. Siba CEO James Calder questioned the point of giving relief measures to the hospitality sector if local beers would not be available once the economy reopened.
