Dear Chancellor,

We are writing to you as Chancellor of the Exchequer, as publicans, the people who actually run the UK’s famous pubs. We are coming together in this letter to reach out to you and urge you to listen.

We have never been so worried about the future of our own businesses and our entire sector and much of this concern is a direct result of the disastrous cost hikes you plan to impose on us.

The effects of your Budget 2024 measures as they stand will be to damage employment and to close businesses, with hugely detrimental consequences not just for our pubs, but also for local high streets and all the communities who value and need their local pubs the length and breadth of the UK.

Our Pubs are in a State of Emergency

UK pubs are a state of genuine emergency amidst the ongoing cost of living crisis. As has been very well documented we are all still grappling with the lasting financial effects of Covid, many still paying off Covid debts as well as facing spiralling energy prices which show no realistic sign of coming down and for which no relief has been forthcoming from Government. All other prices, including beer, are rising too.

We are already in the grip of an ongoing pub closure crisis due to the sheer cost of doing business in our sector. We have lost one third of our precious UK pubs since the turn of the Millennium, and numbers have recently fallen to an all-time low at under 39,000. The scars left by these closures are clearly visible in high streets and communities across the UK.

Yet instead of helping, you are doing the exact opposite by openly adding to our huge existing cost burdens. The cumulative impact of your budget will be disastrous for pubs and publicans.

Your budget was an attack on many hardworking people

The claim made that your budget was not increasing taxes on ‘hardworking people’ was frankly offensive, when we as publicans ourselves are extremely hardworking people, working day in day out running our pubs and, in many cases, having virtually no time off. You are imposing a huge tax hike on us in the form of a National Insurance rise (on top of the rise in wages), as well as the huge cut in the business rates relief that has been a lifeline for so many of us. Taken together this is an eye-watering tax and cost hike for our businesses and is completely unaffordable for many publicans.

There are a worrying number of publicans currently making little or nothing from their pubs after having paid staff, suppliers and many other bills. Our margins are extremely small and these new cost hikes will only make that bad situation even worse. In many cases, publicans are already actually on a lower hourly rate than their own staff, such is the challenge of the current climate.

Your planned increase to Employers’ National Insurance contributions alongside an increase to the minimum wage will simply be a bridge too far for many already marginal pub businesses, and will undoubtedly cost jobs in the sector and lead to business closures.

At the same time, cutting business rates relief is desperately ill-timed. Such a cut should only have come alongside long-promised reforms to the out-dated business rates system that impacts so harshly on our high streets, and on pubs in particular due to the unfair and unique way in which they are assessed.

You have repeatedly stated that growth is the number one priority for this government. We agree of course that growth is vital and we believe our pubs and the wider hospitality can and should be a key driver of growth, but this simply cannot happen if, at this critical moment, our businesses are finally pushed over the brink by yet more cost pressures.

Taken together, the changes to the Employers’ NI and business rates system will impose new costs to the average pub that will run into many thousands of pounds, while all other costs continue to rise. What do you expect to happen in such a situation, when we are already losing pubs at a rate of around a thousand per year?

There have already been many stories of businesses closing in advance of April’s changes, for example with publicans choosing to walk away from their pubs at lease break points rather than continue into a future they know they cannot afford.

Business closures and job losses will only gather pace – delivering the absolute opposite of growth – if you continue to refuse to rethink your plans and simply press ahead.

We need a change of course – NOT warm words

We note that the Prime Minister has recently said that he expressed his ‘support for pubs’ by backing the Daily Mirror’s campaign. He said, pubs are “hugely important” and that “they are the places where friends, family, community come together around something which is very British – the pub”.

Deputy Prime Minister Angela Rayner has also given similarly warm words, claiming that she is “determined” to save community pubs – insisting: “We’re not ready to call last orders.”

Yet the Government’s Budget measures have indeed already called last orders for many pub jobs and businesses, and without a change of course they threaten many more pubs all over the UK..

Words are easy, but without actions to back them up, they are not only cheap, but dishonest. Please show genuine support for pubs by helping us now, in the Spring Statement.

What you and the Government needs to do to save pubs and support them through this crisis

• We implore you to reconsider your plan to impose two major cost shocks to our industry this April, in the form of a huge cut to business rates relief and a major hike in Employers National Insurance contributions. Alternatively provide equal direct support or tax cuts. The entire hospitality sector is crying out for an emergency VAT cut and we say this must include all drinks, including alcoholic drinks, or it would be a disastrous blow to the thousands of wet led pubs currently serving at the heart of their communities, and to the hard-working publicans that run them.
• Scrap the lowering of the threshold on NI, to allow pubs and other small businesses to continue to employ staff on part-time entry level jobs. The lowering of the threshold is disastrous for pub staff.
• Delay any cut to business rates relief until you deliver on the commitment to reform the unfair business rates system which sees pubs paying more than other types of small businesses.
• We also ask that you commission a study into Small Retailers’ (VAT) Relief, which would see small, independent businesses like pubs and small shops pay a lower level of VAT than large corporations (a measure which could be cost-neutral to the Treasury).

Finally, please also do not fall into the trap of believing that cutting beer duty helps pubs and publicans. Beer duty is a production tax, not a tax on pubs, and any freezes or reductions have a negligible impact on pubs and publicans while instead funnelling extra millions to global brewers. Please do not repeat the travesty of last year, when publicans were dismayed at your claim to be ‘taking a penny off a pint’ when in reality your Budget will actually put the price of an average pint up by over 30p.

Change course and help us unleash the potential of the UK’s world famous pubs

Pubs and hospitality businesses are relying on you to see sense at this point and abandon your plans to impose these huge new costs on the sector at this worst possible moment. We urge you to listen, change course and give meaningful support to pubs and the UK’s publicans.