Ahead of Chancellor Jeremy Hunt’s Autumn Statement later this month, a new survey conducted by UKHospitality, the British Beer and Pub Association (BBPA), British Institute of Innkeeping (BII) and Hospitality Ulster reveals that Government action on business rates is viewed as a top priority by 60% of businesses in the sector, up 16% from August.
Business optimism, meanwhile, has slumped to 29%, down 10 percentage points from the summer.
The survey highlights the double whammy of rising business costs and more cautious consumers facing operators, with budgets stretched thin due to the cost of living crisis.
More than half of hospitality businesses say they will reduce investment and cut staffing levels without business rates support, with 38% of venues currently failing to make a profit.
In a joint statement, the trade bodies said: “These figures lay bare the enormous impact inaction at the Autumn Statement would have on the hospitality sector.
“Pubs, restaurants, hotels, coffee shops, to name a few, will fall victim to a significant business rates bill, if relief expires and rates are hiked with inflation.
“Reducing investment and cutting staffing levels are the last thing venues want to do. In fact, they want to do the opposite, but their hands will be tied if rates increase to such an extent in April.”
For the last year business rates have been frozen, with retail, hospitality and leisure businesses also benefitting from a 75% discount capped at £110,000 per firm.
However, as things currently stand business rates are set to increase next April under the Government’s ‘multiplier’, which is pegged to inflation in September as measured by the consumer price index.
Figures released by UKHospitality last month suggest the end of current rates relief combined with the rate of inflation in September running at 6.7% could leave hospitality facing £864m in business rate costs next year.
“Businesses are only able to absorb endless cost rises for so long and yet more pressure in the form of business rates will only force them to consider whether this is passed onto consumers,” the statement continued.
“It must also take steps to reduce the overall tax burden on the sector in relation to business rates, VAT and excise duty.
“These businesses are at the heart of communities and high streets across the country, employing millions, generating economic growth and driving investment across our cities, towns and villages.
“Our economy cannot grow if hospitality cannot grow. The Government must act immediately to underpin this growth and ensure our pubs and hospitality venues survive.”
Jeremy Hunt is scheduled to deliver his Autumn Statement on Wednesday 22 November.