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Hospitality needs Budget help to avoid ‘significant damage'

08 March 2016 by
Hospitality needs Budget help to avoid ‘significant damage'

The hospitality industry needs help from the government in next week's Budget if it is to avoid "significant damage".

That's the warning from purchasing firm Beacon, which highlighted a range of concerns regarding alcohol duty, the National Living Wage, and tourism VAT.

The warning comes after calls from the beer sector last month for the Chancellor to cut duty in this month's Budget, claiming that the three previous cuts have supported almost 900,000 jobs around the country and contributed £22b to the economy.

However, Heineken, Diageo and Molson Coors have raised prices of beer recently by an average of 3p per pint, increasing prices at the bar by 5p-10p.

Many suppliers have quoted the impact of the National Living Wage, which comes into force next month.

Paul Connelly, managing director at Beacon, said: "The hospitality industry is under huge pressure at the moment. We are already seeing price increases from suppliers in order to offset the impact of the National Living Wage coming into force next month. Our concern is that the mixed messages surrounding alcohol and its pricing will drive consumers away from their local pub, restaurant, bar or hotel, choosing instead to buy alcohol to consume at home. Add to this the growing health warnings surrounding alcohol and the messaging for both business owners and consumers becomes extremely confusing."

As a result, Connelly said he wanted to see clarity on alcohol policy from the government in the Budget and for the hospitality industry to be given the best opportunity to prosper in a time of change.

Beacon, which is the sister company to Best Western Great Britain, is also urging the government to reduce the current tourism rate of VAT of 20%.

"A reduction in Tourism VAT would boost GDP by £4b a year, create 120,000 jobs and deliver £3.9b to the treasury. We strongly believe that this needs to happen to help hospitality businesses compete in the European marketplace," said Connelly.

"The government simply must do more to support UK hospitality businesses, or else risk significant damage to the industry."

Beacon calls for government support on National Living Wage >>

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