More anger directed at chancellor following failure to freeze VAT for hospitality in spring statement: Further anger has been directed at Rishi Sunak after the chancellor failed to announce any sector-specific support in his spring statement. The industry has long been campaigning for its rate of VAT to be frozen at 12.5%, highlighting both the importance of the sector to the UK’s economic recovery, and to the damage already done to it by pandemic-related lockdowns and subsequent restrictions. But hopes of avoiding a return to the rate of 20% were dashed when the chancellor failed to make any mention of such a move in his “mini-Budget”. Nick Mackenzie, chief executive of Greene King, said: “While the government has taken some important steps to address the cost-of-living crisis, including the very welcome cut to fuel duty, we feel the measures do not go far enough to support pubs. We’re disappointed the chancellor has failed to reverse the VAT rise for the hospitality sector, which is a bitter blow for UK pubs still struggling to recover following the pandemic. Coupled with rising prices across the supply chain, and disproportionately high business rates, today’s VAT hike is a missed opportunity for the industry and puts at risk the ability of UK pubs to fully recover from the pandemic, create jobs and support the wider economy.” Neil Manhas, managing director and chief financial officer at Pizza Hut UK and Ireland, added: “Several government initiatives have been critical for the survival of hospitality businesses, but the temporary VAT cut has played an out-sized role in allowing the industry to rebound following the pandemic. The government choosing not to grant an extension will be devastating for the momentum of our post-pandemic growth, recruitment and expanding the support we offer our communities.” Clive Chesser, Punch Pubs & Co chief executive, said: “The spring statement signalled a missed opportunity for the chancellor to provide the critically needed long-term strategic support to a sector that has paid a disproportionate burden of tax for decades. This is hugely disappointing but we will continue to lobby the government for the essential, targeted and meaningful financial support required to help our sector to thrive again.” JD Wetherspoon chairman Tim Martinsaid: “We are naturally disappointed the chancellor has not taken the opportunity to reduce VAT in respect of food in pubs and restaurants to the same level as supermarkets. It does not make economic sense for the hospitality industry to be taxed at a higher rate.” Emma McClarkin, chief executive of the British Beer & Pub Association, added: “The sector remains on a knife-edge as it emerges from the pandemic, and the impact of the recent energy crisis and invasion of Ukraine has ensured the turbulent times will continue. The coming months could be some of the hardest yet for our pubs and brewers, and the failure to act represents a hugely missed opportunity.” Ronan Harte, chief executive of BaxterStorey, said: “As a workplace hospitality provider, we have started to see promises of a fast recovery following the latest restrictions lifting, with more and more customers returning to the office on a more frequent basis. However, with the cost of living on the rise and consumer spending likely to suffer as a result, failure to do more to support hospitality bosses may impact this upwards trajectory and leave the industry struggling to invest and forward plan.” Sunak made his statement against a backdrop of inflation rising to a 30-year high of 6.2% in the 12 months to February, and forecast to rise further to 7.4% this year.
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