2022 budget fails to secure a future for our independent food and hospitality sectors
Many of our independent restaurants, bars and food businesses are currently holding their nerve, and waiting for a return to business as usual in the Spring. We’re anticipating a quiet January and February, and the hopes of many are pinned on a Spring bounce back, once any winter waves of Covid-related illness have passed.
Come April however, hospitality will instead be hit with the triple impacts of inflation-related cost increases, the bounce-back of business rates (currently reduced by 34%) and the increase of VAT to its original 20% (the highest in Europe).
Yesterday’s budget, unfortunately, did little to reassure independent business owners that hope was in sight, in spite of 19 months of ongoing challenges and financial uncertainty.
UK Hospitality has placed inflation-related cost increases for the industry at £7.5-£8billion, which ultimately means that the cost of buying British made food products or eating out at your local independent restaurant is only set to increase.
A reduction in alcohol duty was welcomed widely by multinational alcohol manufacturers but does little to support the British craft beer sector. Any reduction on duty applies only to 40L kegs, while most of our craft beer production is in 30L kegs excluding them from any relief.
Speaking to local Bristol Brewery Lost & Grounded, Founder Alex Tronscono said:
“The duty relief announcement yesterday favouring 40L casks and 50L kegs does little in the way to support the majority of the UK craft brewing industry, who by large use 30L kegs. 30L kegs are better for manual handing and are a much better volume for selling specialist products in smaller independent venues. The announced change will do little to give us any support, and we hope the government revises the container size to include all containers 20L or larger.”
Matthew Pennington, Head Chef at The Ethicurean said:
“Our government has let down everyone in the hospitality sector and its supply chain with this budget. We should be placing food, its production and supply, at the heart of the UK’s growth in an attempt to repair the setbacks of the past two years. We have been calling for a stall in VAT increase for more than nine months. The hospitality sector is critical in creating jobs and food security, from plate to producer; the planned April VAT and Business rate increases show a complete naivety from our government to the pressures the sector is currently suffering. The time to support a localised food system has never been more critical. Is the government intent on wiping it out?”
Bristol Food Union Director, Aine Morris said:
Our current government seems to be good at talking the talk, without offering solutions that walk the walk for our independent food and hospitality sectors.
The increase in the cost of energy, food and labour, plus the return of 20% VAT and full business rates in April, will cripple those businesses that have worked tirelessly to stay afloat over the last 18 months. A government that would make the cost of hiring staff more expensive rather than less, is a government that fails to grasp a basic understanding of the depth and scale of the challenges currently being faced by UK food, farming and hospitality.