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Pubs / 08 July 2020

Chancellor’s positive Summer support package is a welcome first step on the long road to recovery

BBPA highlights that more financial help will be required to help thousands of community pubs where food is not a focus, as well as the nation’s 2,000 breweries

 

The British Beer & Pub Association (BBPA), the leading trade association representing brewers and pubs, has today warmly welcomed Rishi Sunak’s positive package of support as a helpful first step on a long road to recovery, especially for food led pubs and those with accommodation and will help secure jobs.

However, it has also highlighted that further support will be required to help the thousands of community pubs and more than 2,000 UK breweries get back on their feet.

The Chancellor announced a cut to 5% on VAT for accommodation and food in hospitality. He also announced a ‘eat out to help out’ scheme to run during the month of August, but which will only apply to food and non-alcoholic drinks.

The trade association said the sector-specific VAT cut, which it had called for, would be a huge boost for pubs that serve food and offer accommodation, and would also help compensate for an expected long period across Summer and beyond of reduced sales and revenue compared to before lockdown.

It also said the Chancellor’s ‘eat out to help out’ scheme, where Government will cover 50% of the cost of food in hospitality up to £10 per person per visit, will help encourage pub goers back to their local pubs where they offer food. However, for those pubs where revenue is more drinks led, the announcement today provides less help, the BBPA said.

The trade association also welcomed the Job Retention Bonus, stating it hoped it would help the sector to bring back as many of its furloughed staff as possible. It had previously estimated that 90% pub staff were furloughed.

The trade association also welcomed the announcement of the ‘kickstart job scheme’ for young people aged between 16 and 24 on Universal Credit, subsidising the costs of work placements for them in businesses. Pubs already directly employ 600,000 people and 43% of them are under 25, making them a vital source of jobs for young people.

The trade association highlighted that the pub and brewing sector has huge potential to create thousands of new jobs and employ more people, but to do this it needs to be thriving, not just surviving. This requires more support in the medium term directed at all pubs and brewers so they can help lead with the economic recovery. These measures include a significant cut to beer duty to bring the UK in line with other European countries who pay far less tax on beer, and a fundamental review of the business rates system so that pubs no longer pay an unfair share of them.

 

Emma McClarkin, Chief Executive of the British Beer & Pub Association, said:

“The chancellor has communicated clearly that pubs and hospitality are safe and open for business.

“The positive measures announced today are a welcome first step on what we believe will be a long road to full recovery for our sector.

“These initiatives, which we have been calling for, will be huge for pubs that serve food and offer accommodation, and will also help compensate for an expected long period of reduced sales and revenue for pubs.

“The ‘eat out to help out’ scheme, taking place in August, will also help stimulate visits to thousands of pubs that serve great food. It will help show to consumers that our pubs are back open for business.

“Of course, for those pubs that do serve significant amounts of food or offer rooms to stay in, the cut to VAT for these to 5% will be a huge boost. Whilst the measures announced today will help food led pubs, those who just serve beer may feel they are left wanting.

“The Job Retention Bonus will help our sector to bring back as many of its furloughed staff as possible – with 90% of pub staff furloughed, it should help protect many jobs.

“Our pubs directly employ 600,000 people – 43% of which are under 25, making them a vital source of employment for young people in communities across the UK. We therefore welcome the ‘kickstart job scheme’ announced today for young people on Universal Credit.

“The pub and brewing sector has huge potential to create thousands of new jobs and employ more people, but to do this it needs to be thriving, not just surviving. This will require more support in the medium term directed at all pubs and brewers so they can help lead with the economic recovery. These measures include a significant cut to beer duty to bring the UK in line with other European countries who pay far less tax on beer, and a fundamental review of the business rates system so that pubs no longer pay an unfair share of them.

“Such measures will ensure our pubs thrive and continue to bring together people from all walks of life as they have done for centuries. We look forward to these measures being announced in the Government’s planned rebuild phase.”

 

 

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