Today Rachel Reeves delivered the Autumn Budget to the Commons, outlining a series of changes to tax and spending in her first budget as chancellor - and Labour’s first in 14 years.
Moves such as this have been met by some anger and frustration by the hospitality industry, with one of its major trade bodies calling it the ‘latest blow' for the sector. While she also confirmed the price of a pint will drop, a permanently lower level of business rates for the sector from 2026/2027, and increase with the Employment Allowance, many have said it will be ‘incredibly difficult’ for some hospitality businesses to survive.
"All of this means that 2025 will be a painful for hospitality, with a increased annual tax bill of £3bn for the sector." The National Living Wage for people ages 21 and over will also rise by 6.7 per cent to £12.21 an hour next April, Ms Reeves announced. Ms Reeves said the government is moving towards "a single adult rate" which will be phased in over time and announced a significant increase to the minimum wage for younger workers.
Met with cheers around the Commons, Ms Reeves also announced the price of wine and spirits is set to rise, but pints in pubs will cost a penny less. Alcohol duty rates on non-draught products will increase in line with RPI from February next year, Ms Reeves said, while duty on draught products will be cut by 1.7 per cent, which she said this would mean "a penny off a pint in the pub".
“The big ones are the NI and minimum wage, both of which disproportionately affect hospitality. Not entirely sure where she thinks we get 6.7% from, but by far the biggest cost is wages, to add to that cost through mandatory pay rates and NI contributions is bonkers. “I think that the general public have been frightened by what might be coming down the road. I hope that we have a strong festive trading period but how quickly this budget impacts the wider economy is the determining factor.
“However, for us, it’s kind of balanced so the move on draught alcohol helps us, while on the consumer side the freeze on income tax thresholds, fuel duty freeze and so on could be good for getting people out. Tom McNeeney, Head Chef at The Oxford Pub in Rochdale, said yesterday that he was “bracing for impact’. While the minimum wage increase was expected, he said the business rate relief being extended but only to 40 per cent, would ‘effectively double’ his business rates.