Hospitality bosses have said the government has ignored their plight as venues struggle with Covid debts and rising costs.
Calls from pub and restaurant bosses for a VAT freeze fell on deaf ears as the Chancellor unveiled his spring statement on Wednesday afternoon.
The sector had been lobbying for the tax to remain at 12.5 per cent instead of returning to its pre-pandemic level of 20 per cent.
Industry voices have warned pubs will have no choice but to increase the price of pints, with many pub chains already announcing hikes.
Bosses from Greene King, Admiral Taverns and St Austell Brewery said the government had not done enough to support pubs.
Nick Mackenzie, chief executive of Greene King, said: “We’re disappointed that the Chancellor has failed to reverse the VAT rise for the hospitality sector, which is a bitter blow for UK pubs still struggling to recover following the pandemic. Coupled with rising prices across the supply chain, and disproportionately high business rates, [Wednesday’s] VAT hike is a missed opportunity for the industry and puts at risk the ability of UK pubs to fully recover from the pandemic, create jobs and support the wider economy.”
Industry body UKHospitality called the measures a “real setback” for businesses still struggling to keep their head above water after various lockdowns.
UKHospitality boss Kate Nicholls added: “Operators in the sector – large and small – have several hurdles to clear on the road to recovery: huge accumulated debts; unprecedented rising costs for energy and raw goods; a chronic shortage of staff; and a fundamentally unfair and crippling business rates regime we’re desperate to see reformed.”
Boss of St Austell Brewery, Kevin Georgel, said businesses were facing exponential cost hikes particularly with energy and fuel costs.
Georgel added: “We would urge the government to provide further long-term support to Britain’s pubs and breweries by addressing the overall tax burden that businesses now face. This will enable the hospitality sector to rebuild and help businesses like ours play a role in accelerating the UK’s economic recovery.”