Budget update: Harrogate’s hospitality sector greets new support from Chancellor Rishi Sunak

Harrogate's business leaders have welcomed yesterday's Budget by Chancellor Rishi Sunak as a step forward for the town's hospitality sector.

Thursday, 28th October 2021, 10:45 am
Budget boost for hospitality sector - Harrogate business leaders welcomed the slashing of business rates and measures involving duty on alcohol.

In particular, a 50% cut in business rates for was welcomed as a boost for the Harrogate’s post-Covid recovery in the run-up to the crucial Christmas period on the high street.

The list of pre-Christmas economic presents for bars and restaurants announced in yesterday's Budget also included a 5% cut in taxes on pints pulled in pubs.

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And the Government’s plans to increase duty on spirits were also dropped in Wednesday’s statement.

Harrogate business leaders welcomed the slashing of business rates for the retail, hospitality and leisure sectors, even though it will run for only 12 months at the

moment.

David Simister, Harrogate District Chamber of Commerce Chief Executive, said: “Rates are a massive barrier to many would-be entrepreneurs looking to open a shop, bar or restaurant but what is really needed is a total overhaul of the system, which is long overdue.

“With Christmas just around the corner, the announcement couldn’t come at a more opportune time, particularly as these businesses were so badly affected by the Covid pandemic.

“The cut in certain alcohol duties will also give the hospitality industry another reason to cheer.”

As well as making the business rates system fairer in future from 2023, the Chancellor also unveiled major changes to the way drinking is taxed with the main duty rates set to be cut from 15% to just six.

But the fact that the new measure, like plans to bring in business rates revaluations every three years, will not kick in immediately is creating an element of caution over the true scale of the impact of Rishi Sunak’s autumn giveaway.

Sara Ferguson, Chair of Harrogate BID and the co-owner of two town centre hospitality businesses, said: “On the face of it these two budget announcements - a 12-month cut to business rates for those in hospitality, leisure and retail, plus a reduction in certain alcohol duties - are good news.

“Whilst the rates reduction is temporary, I hope it’s long enough to see some of our empty shop units brought back into life.

“This in turn will boost Harrogate’s town centre economy."

The British Chambers of Commerce reacted to the Chancellor's announcement saying it was welcome but the Government had to be ready to do more to get the economy firing on all cylinders again if necessary.

It added that the changes to the business rates system unveiled so far had to be only the start of reform, not the end.

Shevaun Haviland, Director General of the BCC, said:

“There is much to welcome in this Budget for business communities across the UK.

“The Chancellor has listened to Chambers’ long-standing calls for changes to the business rates system and this will be good news for many firms.

"This will provide much needed relief for businesses across the country, giving many firms renewed confidence to invest and grow.

"However, these changes must be the start, rather than the end point of the reforms to this broken system."

She continued: "Businesses have been battered by 18 months of the pandemic and problems around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes and there will be difficult months ahead.

“While investments announced today will take time to bed in, Government should consider other action that will relieve immediate pressures, particularly on smaller businesses, such as urgent review of the shortage occupation list to allow for short-term visas in key sectors, and an SME energy price cap.

“If firms face unexpected bumps in the road, the Chancellor must be prepared to take further action to get the economy firing on all cylinders again.”

Yesterday's Budget saw the Chancellor make the biggest changes for the way alcohol is taxed since the 1600s which may also boost Harrogate's important food and drink sector.

The Government has promised to reduce the number of alcohol tax rates from 15 to just six, taxing drinks according to their alcohol content.

Rishi Sunak's aim is simplify the system so that the stronger the drink, the higher the tax rate.

The duty rate cut on draught beer and cider of 5%, taking 3p off a pint, may save consumers £3 billion over the next five years, though this is dependent on whether pubs, bars and other businesses pass these cuts onto the consumer.

The Society of Independent Brewers which represents much of the craft beer industry has reacted positively to the Budget but with the caveat that the details mean there may be less help for independent breweries than there seems at a glance.

James Calder, SIBA's chief executive said; "The Chancellor’s Budget introduced radical changes to the outdated Alcohol Duty system which will benefit brewers of lower strength beers, traditional cask beer and create a more level playing field between small breweries and cider producers.

The lower rate of duty for beer sold in pubs is a huge win for the industry and something which SIBA has been campaigning for.

"We look forward to working with the Treasury as they implement this landmark policy.

"Whilst hugely beneficial for producers of Real Ale, which is sold in 40 litre casks, most craft keg beer in the UK is sold in 30 litre kegs, meaning they cannot benefit.

"By amending this lower threshold to 20 litres the Treasury can ensure all independent breweries benefit from this welcome new duty relief on draught beer. "

He continued: "The immediate freeze in Beer duty is very helpful at a time when brewers are seeing a myriad of other supply and running costs rising, and the Business Rates Relief for pubs will be welcomed by many in a struggling sector.

"The new Small Producer Relief scheme builds on the hugely successful Small Breweries Relief scheme (SBR) and we will continue to work constructively with The Treasury to implement positive reform of SBR that does not see small independent breweries worse off.

"Cutting business rates bills for hospitality premises by 50% for the next year is also hugely beneficial but SIBA would like to see the definition of those premises expanded to cover all breweries, taprooms, bars and pubs."

In addition, any simplification in the tax system for alcohol will not take effect until February 2023 including the new lower rate for draught beer.