Here's how the Autumn Statement will affect your local pub

Courtney Goldsmith
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A few of the industry's Autumn Statement wishes came true, but cost pressures are building. (Source: Getty)

Without mentioning the pub industry directly, the Autumn Statement laid out a handful of policies that will affect the sector. Here are the industry's top concerns.

Increasing the National Living Wage will hurt pubs

Wages for over-25s will rise 30p to £7.50 per hour in April 2017, and the rates of National Minimum Wages will increase as well, chancellor Philip Hammond announced in his Autumn Statement.

But in the current state of economic uncertainty, the increase will present challenges to pubs already facing cost pressures, Brigid Simmonds, chief executive of the British Beer and Pub Association (BBPA), said.

Read more: The National Living Wage is going up again next April

Labour costs are high in the industry, at between 14 and 25 per cent of operating costs, according to the BBPA.

But wage increases fell short of expectations, which was noted by the Association of Licenced Multiple Retailers (ALMR).

The lower-than-expected increase "will put money back in the pockets of our customers, but will still tighten margins for businesses and some will struggle to afford it", ALMR Chief Executive Kate Nicholls said.

Nicholls called for wage rates that reflect the economic landscape.

Pubs still need broader support on business rates

The BBPA and other industry bodies have written to the chancellor to call for better business rates for pubs.

Reform of the rural rate relief is one win for the pub industry. Simmonds said the relief "provides a welcome correction to an anomaly that would have penalised rural pubs".

Read more: Hold the freeze please: Here's the booze sector's Autumn Statement wishlist

The inconsistency between rural rate relief and small business rate relief will be removed, and the government will double rural rate relief to 100 per cent from 1 April, Hammond said.

“Whilst we support the reduction in the cap on transitional rate relief," Simmonds said, "We want to see enhanced relief for pubs that will be hit hardest by the 2017 revaluation, and an overall review of how rates impact on Britain’s pubs."

Read more: Craft beer and premium pubs are a hit: Marston's investment set to pay off

A full list of the BBPA's priorities includes:

  • An increase in the upper threshold for small business rate relief, from £15,000 to £20,000

  • A mandatory 50 per cent reduction for businesses listed as an Asset of Community Value, funded by the relevant local authority, to recognise the community benefit of the property

  • The earlier introduction of the consumer price index uprating of the multiplier to April 2017

  • The introduction of transitional rate relief from April 2017, with better transitional relief for pubs in London and the South East, with support from the Mayor of London and local authorities

  • A new pub-sector relief scheme to be introduced by April 2018

  • Reform of rural rate relief which prevents some pubs fully benefiting from small business rate relief changes.

The duty freeze was nice, but a cut would have been better

Beer duty, which accounts for up to 50 per cent of the costs of a UK brewer, is still a concern despite the freeze to current rates, said BBPA.

“Our rate of beer duty in Britain is considerably higher than all other major European brewing nations, and we are now calling on the chancellor to cut beer duty in the 2017 Spring Budget, and tackle the unfair burden it places on Britain’s beer drinkers, publicans and brewers," Simmonds said.

The Campaign for Real Ale (CAMRA) cheered on the freeze but said pubs are under too much financial pressure.

Colin Valentine, CAMRA's national chairman, said the previous duty increases are driving customers to drink at home.

“This trend not only hurts UK businesses, but is also contributing to the demise of our communities and affects people’s personal wellbeing. While a freeze in beer duty is welcome, CAMRA would like to see the government do more to reverse the damage done by the beer duty escalator by cutting duty in the 2017 Budget," Valentine said.

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