Pubs launch SOS campaign ahead of April tax rise

The British Institute of Innkeeping (BII) launched its ‘Our Pub’ campaign yesterday, in a bid to drum up support for the UK’s teetering local pubs.

Soaring energy costs and inflation hitting both food and drinks has put many hospitality businesses in dire straits. Our own research revealed that confidence is low. Some leaders are predicting that the incoming budget measures could hit organisations even harder.

The campaign aims to raise awareness of data from BII that come April, if pubs make no changes, over 80% will be unprofitable.

Concern mounting

Concerns have been rising within the hospitality industry since the unveiling of the budget. The incoming increase in employer NICs payments specifically prompted UKHospitality board members to write an open letter to Chancellor Rachel Reeves.

In it, they warned that their profit margins would be damaged by the changes. “The changes to the NICs threshold are not just unsustainable for our businesses, they are regressive in their impact on lower earners,” the letter reads, adding that the changes will “unquestionably lead to business closures and job losses within a year.”

This has been echoed in other industries too with iwoca — one of Europe’s largest SME lenders – warning that over 300,000 SMEs may cut jobs due to the rising NICs.

Rallying call

This new BII campaign comes before the budget measures will really bite in April. It is hoped that it will raise the profile of the issues facing the BII’s 13,000 members, who are mainly licensed trade professionals, running independent pub businesses.

Steve Alton, BII CEO explained that pubs are “fabric of our society” and need to be protected. “They are not just places where people can have a pint. They are vital to communities, towns and high streets and are a unique attraction to locals, visitors and tourists alike,” he said.

This is reinforced by our survey data, which found that 64% of hospitality firms say strong customer loyalty is their biggest success factor (above average compared to other industries).

Alton damned the incoming rises as “a hammer blow to pubs across the UK” especially after the COVID pandemic and then the price hikes over the past five years. “The Government’s short-sighted approach to taxing small businesses to fill the black hole in the budget will mean rising inflation, unemployment, [and] lost investment in communities,” he stated.

Galvanising action

The call to arms from the BII is being echoed by other businesses. The BII is asking members of the public to send a “flood of emails to local MPs” in reaction to what has definitely been a divisive Budget.

The same issues affecting pubs – the UK’s virtually unprecedented energy, staffing and rent overheads – are impacting businesses across the board. They are already being blamed for a slow-down in business creation. The next stage could be a string of business closures.

The BII is pretty stark in its predictions and is hoping that customer loyalty might be enough to get its members through the next phase of this ongoing crisis.