Pub owners have issued a stark warning about the impact of rising taxes on the hospitality industry, arguing that the latest Labour Budget poses a greater threat to pubs than the Covid pandemic.
It comes as Greg Stafford, the Conservative MP for Farnham and Bordon, launched a campaign urging the Government to reduce the tax burden on the struggling sector.
His efforts follow a roundtable discussion, where 30 publicans and representatives from the British Institute of Innkeeping (BII) gathered in Farnham to voice concerns over tax hikes set to take effect in April under Labour’s latest fiscal rules.
Mark Robson, director of New Dawn Pubs and chair of the institute, highlighted the mounting financial strain on pub owners.
“Publicans are really having a torrid time, and that’s been exacerbated by the Labour budget in October,” he said.
Mr Robson said he employs 95 to 100 people across his three venues, including The Castle pub and restaurant on Castle Street, Farnham. He warned that the tax changes in the Autumn Budget, combined with an increase in the minimum wage, would add £240,000 a year in costs to his business.
“This is absolutely crazy and unsustainable,” he said. “If the Government doesn’t act, there will be a massive catastrophe in the industry, with pubs closing all over the place.”
Publicans also pointed to the unfair tax disparity between pubs and supermarkets, with supermarkets exempt from VAT on food while pubs are not.
Mr Robson said: “Hospitality is the third-largest employer in the UK, and it can be a driver for economic growth if given the right support.
“But the level of taxation being forced on pubs is not sustainable. We need to reduce VAT on hospitality to 10 percent, as seen in other European countries, to allow these businesses to survive.”
Many pub owners have already cut costs in response to the financial pressure, said Mr Robson.
“There are a lot of pubs in Farnham but it doesn’t mean they’re all successful. We had Jack and Alice close recently, which was a nice little restaurant and bar,” he said.
“Just because you walk into a busy pub, it doesn’t mean it’s thriving.
“The margins are so tight in our industry, you need a certain level of turnover to cover high energy costs, the staffing, and increases in prices from our supply chain, which is making the cost of running a business very, very expensive.”
Under chancellor Rachel Reeves’ tax plans, employer National Insurance Contributions (NIC) will rise from 13.8 percent to 15 percent in April, while the earnings threshold for tax relief will be cut from £9,100 to £5,000.
Robin Catchpole, landlord of The Bluebell pub in Dockenfield, echoed Mr Robson’s concerns.
“Pubs are going to be unfairly burdened with what’s happening in the new Budget,” he said.
“Since Covid, there has not really been any help for an industry that was decimated by the pandemic.”
Bluebell patron Tony Faun, 68, agreed that tax rates were too high on pubs.
“I chose to move to my house in Dockenfield because it had a pub within walking distance. This pub really is the heart of the community and without it, I think the village would really suffer.
“The Government should be doing more to help these pubs survive, not adding to their tax burden.”
To support the landlords, Mr Stafford is urging constituents to support a petition and voice their opinions via a survey on his website.
“Labour’s policies are a wrecking ball for our pubs,” said ,” said Mr Stafford. “The chancellor has handed down a death sentence to the British pub as we know it.
“Hospitality is the UK’s third-largest employer and a cornerstone of our communities, yet Labour has loaded it with crippling costs and bureaucratic red tape. During Covid, there was a lifeline. Now, businesses feel abandoned and betrayed.
“This isn’t just bad policy, it’s economic vandalism. Without urgent action, Labour will have the blood of Britain’s pubs on its hands.”
For more information on the campaign, visit: www.gregorystafford.co.uk