Pub operators react to Budget blows

Leaders from across the pub and bar sector have been sharing their reactions to the autumn Budget.

Although there were glimmers of positivity delivered by the chancellor Rachel Reeves, decisions on business rates and National Insurance contributions have left operators nervous about the costs to come.

Reeves announced she will continue the business rates relief from April 2025 for hospitality venues, but at a lower rate of 40%, instead of the current 75%, up to a cash cap of £110,000 per year. There will then be a full reform of the business rates system in 2026/27.

Alcohol Duty was cut by 1.7% for draught alcohol products, but duty rates on non-draught products will increase in line with RPI from February next year.

The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The National Minimum Wage for 18- to 20-year-olds will also rise from £8.60 to £10.00 an hour.

National Insurance contributions by employers will rise from 13.8% to 15%. In addition, the threshold at which businesses start paying National Insurance on a workers' earnings will be lowered from £9,100 to £5,000, with the Employer Allowance doubled to £10,500.

Here is some of the reaction from across the trade...

Admiral Taverns

"Whilst we welcome the chancellor’s announcement to cut draught beer duty for pubs, which we repeatedly campaigned for, and provide a short extension to the small business rates relief at a lower level, we are disappointed with the lack of meaningful incentives to invest and grow," says Chris Jowsey, CEO of Admiral Taverns, which has over 1,420 pubs across the UK. "Community pubs remain massively overtaxed and with the wider alcohol duty still increasing, the cost of doing business is only rising for our publicans. 

"Today was a prime opportunity for the new government to show its support for a sector which contributes over £34bn to the UK economy each year and provides over 1m jobs. Unfortunately, the cumulative impact of these measures will cost community pubs significantly. Given we will still see business rates double for a lot of pubs, it is even more important now that the government uses the next two years to implement a proper reform of the business rates system which is fairer for pubs, an industry which is one of the most heavily taxed business sectors. This will ensure the longevity of the much-loved institution, as well as the many communities, jobs and livelihoods which rely on it."

The Devonshire

"I don't worry myself with this stuff, because everyone's in the same boat," says The Devonshire landlord Oisín Rogers (pictured) before the Budget was revealed. "I just get on with it. If something gets cut, brilliant. If it goes up, everyone has to pay it. I don't see the point in moaning about it, because them’s the rules and you have to operate. If you're playing football, you don't complain that the corner flag should be a bit closer to you. You just play the game. I'd love for VAT to drop, but it's not down to me to moan to the government, to tell them to do it. I just want to do my job. I'm not a political person."   

Stonegate

"This Budget is a bitter pill to swallow for businesses both large and small," says David McDowall, CEO of Stonegate Group. "The policies announced by the chancellor Rt Hon Rachel Reeves will significantly increase costs for businesses across our sector at a time when many are only just about coming up for air from the aftermath of a pandemic, energy crisis, rampant inflation, and cost of living pressures. 

"It has a significant impact on Stonegate Group but more importantly on our Publicans and Operating partners – who are perfect examples of the hard-working people that the chancellor claimed she was so keen to protect."

Fuller's

"The lowering of the threshold for Employers’ National Insurance is a crippling hammer blow to our sector," says Fuller's CEO Simon Emeny. "It disproportionately impacts hospitality – a huge employer of young people, particularly students, often working part time. And while news of a new hospitality business rates multiplier is welcome – we don’t know what that looks like and it does not come into play until 2026-27, while the changes to NIC will be with us from April. I’m just utterly disappointed. The government has chosen to pass the biggest tax burden to hospitality – a sector that delivers countless jobs and runs pubs that have huge social value to local communities."

Young’s

"We are pleased that the government has decided to cut draft duty, which is a small step towards reducing the huge tax burden faced by our industry," says Simon Dodd, CEO of Young’s. "Unfortunately, given the other measures announced today, there are many more snakes than ladders for the hospitality sector, a vital industry for the communities we serve and the country’s economy as a whole. 

"We support the government’s move to increase National Living Wage. Paying our people well is really important to us as they are the lifeblood of our business. However, this needed to be balanced with support elsewhere, as there isn’t a magic money tree in the gardens of hospitality that can sustain a 6.7% increase in its cost base overnight. The cut in draft duty and business rate relief for next year hasn’t really touched the surface in offsetting this significant increase in cost. 

"The chancellor says she wants to stimulate growth, so do we. We are pleased that the government has listened and committed to support hospitality through reviewing business rates, but this needed urgent reform especially when costs are increasing substantially next year. The can has been kicked to 2026-2027 before we get certainty and real change. We need the government to deliver on this promise, which has too often been swept under the carpet and ignored." 

The Beautiful Pubs Collective

"After two years of striving to bring our pubs back to profitability and preparing our business for its next phase of growth, the Budget presents yet another significant challenge for us," says Sam Hagger, founder of The Beautiful Pubs Collective and BII member. "We fully support the need to increase wages for our youngest team members, but we believe this should be achieved through training and development to build a sustainable, skills-based workforce that benefits everyone in the future. Today’s announcement will put enormous pressure on a sector that contributes far more than the government acknowledges and will ultimately lead to price inflation, prompting guests to reconsider how often they can support their favorite hospitality businesses."

Greene King

"Despite a glimmer of hope on the horizon for business rates reform in 2026, the layering of substantial costs on pubs next year is going to leave businesses with difficult choices around investment, prices and hiring," says Nick Mackenzie, CEO of Greene King. "The importance of the pub and brewing sector, which employs more than one million people and invests £2bn a year in communities across the UK, cannot be underestimated. While a reduction in draught duty is welcome, in reality it is a drop in the ocean compared with the cost impact of lowering the threshold for National Insurance contributions and increasing the rate paid by employers. 

"I would urge the chancellor to work with the industry to help reduce the cost of doing business as a matter of urgency, with the possible changes to business rates for hospitality in 2026 needing to happen sooner to end the unfair taxation of the nation’s locals." 

Inn Cornwall

"As a small pub group owner, I’ve just done some calculations on what the budget means for us," says Mark Holden, owner of Inn Cornwall and BII member. "The business rates increase from April will be £33.5k a year, but the larger impact for us is the lowering of Employer NI to £5k. This lifts 40% more of our team into contributions. If current employer NI age levels and categories stay the same (which we are unclear of) then we are looking at a £41,294 a year increase. In total, nearly £75k more for our small business to find, at a time where we are struggling for profitability anyway. I am concerned many jobs will be lost across the sector."

Burgh Island Hotel

"Whilst Burgh is in a good position to deal with these extra costs announced by the chancellor, many are less fortunate," says Giles Fuchs, owner of Burgh Island Hotel. "An increase in National Insurance Contributions will compound the challenges faced by many hospitality businesses, particularly those already managing tight profit margins. For an industry that plays a crucial role in employment across the UK, being the third-largest employer, the NIC hike risks stifling growth at a critical time.

"The upcoming 6.7% increase in the minimum wage in April 2025 adds further financial strain, as hospitality businesses will face significantly higher payroll costs. Coupled with the end of the 75% business rates relief for retail, hospitality and leisure businesses next April, this represents an additional blow to a sector grappling with soaring operational costs. Without this relief, the sector faces a battle to maintain its role in supporting local economies and driving tourism."

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