“The HBAA welcomes the Chancellor’s increasingly positive short-term growth forecast, the steps to alleviate the impact of the business rates increase on smaller businesses, especially pubs, as well as the further investment in the roads network and internet,” said Louise Goalen, chair of industry association HBAA. Goalen was reacting to Chancellor Philip Hammond’s Spring Budget Statement, 8 March.
“All these initiatives will be beneficial to the events and hospitality industry and our members’ businesses, either in planning and forecasting or in making it easier for people to travel to meet and communicate,” Goalen added.
“As the events and hospitality industry is growing, it needs to attract more young people to see the industry as a good career opportunity especially with concerns about potential reductions in workers from abroad. Optimising the living wage and providing funds to encourage 16 to 19 year olds to train in the sector are valuable initiatives to help with this.
“However, while the confirmation of the reduction of the corporation tax is good news for our members, we are disappointed that the UK’s VAT rate on hotel room accommodation, one of the highest in Europe, has not also been reduced. That would have been a positive boost to our competitiveness.”
Others in the hospitality industry reacted with anger at the Chancellor’s raising of duty on beer and wine by 3.9% – the first increase since 2012.
Paul Connelly, MD of purchasing company Beacon, said the industry “continues to experience significant price pressures and this Budget has not helped”.
Inflationary pressures including the National Living Wage, revised business rates and food inflation are also set to push costs higher for the industry.
The duty hike, said Connelly, “might be the final straw for many hospitality businesses who had been holding off passing price increases onto the consumer”.
The Chancellor said his Budget set out how the Government would build the foundations of a “stronger, fairer, more global Britain”, adding that the economy was resilient with reserves in the tank as the Government prepared to enter Brexit negotiations with EU.
Hammond’s Budget used a mix of tax rises instead of increased borrowing to meet a range of spending commitments.
CBI director general Carolyn Fairbairn described Hammond’s announcement as “a breakthrough Budget for skills….Firms will be looking for ongoing partnership with the government as they try to make the Apprenticeship Levy work”.
Those working as self-employed professionals in the event sector would likely be worse off due to changes to National Insurance contributions, however. The rate is set to rise 2% by 2019 to 11%.
The Chancellor announced £90m of investment in transport in the North, although many thought he had not taken the Northern Powerhouse project seriously enough.