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Trade reflects on ‘mixed-bag’ Autumn Statement

Published:  27 November, 2023

Following rumours of a second duty hike in line with inflation, the government quelled fears by announcing a freeze on alcohol duty in the Autumn Statement last week.

However, a second hike would have merely added insult to already considerable injury, and, although news of a duty freeze is welcomed, the overall picture remains bleak following the August tax reforms. 

These sentiments were echoed by Sovereign Brands, distributed by Pernod Ricard UK.

“We’re raising half a glass to the freeze on alcohol duty,” said Sophie Lawrence, marketing and communications director at Sovereign Brands.

“The last three years have been very turbulent for on-trade and while the chancellor’s move is welcomed, we think a real-term reduction is needed to really drive an impact for consumers and businesses still recovering from the Covid hangover, train strikes and the cost-of-living,” she added.

The news was also a mixed bag for the Federation of Independent Retailers (the Fed). While extending the 75% business rate relief and employers’ National Insurance relief for another year, plus a freeze on the small business multiplier, are positives, the Fed was disappointed by the lack of help with energy costs and tackling retail crime.

National president of the Fed, Muntazir Dipoti, said: “We are pleased that the chancellor has taken on board our serious concerns about business rates, but our members are still struggling with extortionate energy bills.

“Our costs are rising all the time, and when you factor in the increase in the minimum wage to £11.44 an hour, some small shops will inevitably have to consider whether their businesses are viable and sustainable.

“It was also disappointing that there was no mention of any increase in public spending, especially on policing, at a time when shoplifting and attacks on shop staff have reached epidemic proportions.”

Meanwhile, Nick Gillett, MD of Mangrove Global, referred to the duty freeze as a “small relief”.

“There’s no doubt that this is a government that fails to understand the needs of both the spirits and hospitality industries. And whilst there were a range of small wins delivered in the Autumn Statement, we are still operating in an environment which is hard to do business in. Especially if you make or sell alcohol,” Gillett said. 

In October, research carried out by CGA by NIQ revealed that the number of hospitality venues in the UK dropped below 100,000 for the first time on record – the equivalent of six closures per day over the last 20 years. With the chancellor’s Autumn Statement also announcing an increase in the Living Wage, no National Insurance reductions for employers, and the sky-high winter fuel bills to look forward to – costs for venues are once again on the up. 

UKHospitality CEO Kate Nicholls said: “The chancellor has brought forward a significant package of business rates measures that will help hospitality businesses across the country. UKHospitality led the calls for the government to extend relief and take action on the multiplier and I’m delighted the chancellor has acted on our asks.

“The decision to freeze the small business multiplier (the raising of business rates in line with inflation) will help those most vulnerable keep the lights on. However, the standard multiplier rising by 6.4% will see businesses representing almost two-thirds of the sector’s trade still facing a £150m rates hike. This will only put more pressure on consumer prices and inflation, at a time when businesses are still grappling with high costs of energy, food, drink and wages.”