Budget 'could save some pubs' in region
- Credit: Sarah Lucy Brown
Rishi Sunak's budget could save some pubs from closing for good - but others will still fall foul of longer term trends, a pubs group owner believes.
Philip Turner, who heads up the Chestnut Group operating 12 pubs employing 400 staff across Suffolk, Essex, Norfolk and Cambridgeshire, broadly welcomed the chancellor's measures - and believes VAT and business rates relief in particular will help ease the hospitality industry's pain.
The biggest plus, he believes, will be the certainty the new announcements will bring - although he felt some could have been announced sooner to save the sector undue stress. It meant some pub owners would feel more secure about investing in their businesses, he predicted.
"I think it's Rishi," he said of the budget speech. "It's articulated well . It's balanced. It's well thought-out. There aren't too many surprises in it."
Pre-announcements on the furlough extension until the end of September and up to £18,000 to help businesses open up the shutters after lockdown showed he wasn't a "rabbit out of the hat" type of chancellor, he said.
Calls for rates and VAT relief for a full 12 months weren't fully heeded, but were balanced out so that effectively businesses would be eased back gently into the pre-pandemic rates, he said.
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There was still scope to make the argument not to take VAT back to the full 20%, he hoped.
"The government knows the demand for hospitality is going to be great over the next six to 12 months and they want to benefit in some way from that," he said.
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He felt there was plenty of pent-up demand for a return to pubs once restrictions are eased, so government wanted to net something from this.
But some trends caused or exacerbated by the pandemic had sounded the death knell for some pub businesses where working patterns such as home working was changing behaviour, he believed.
"There are structural changes in how we live our lives which the budget cannot fix," he said.
He particularly welcomed the announcement of a temporary 130% "super-deduction" on corporation tax for those companies in a position to invest in their business and felt that with increased demand to upgrade and extend facilities, this could be something he would want to look at.
"I think it's brilliant - I think it's very positive," he said.
Corporation tax had jumped from 19% to 25% for businesses with profits over £50,000, but some businesses had been largely unaffected by the pandemic in terms of sales, he said.
"I think what we should be focusing on is if we are in a position to be paying corporation tax that's fantastic," he said.
If there was a slight criticism it was that he felt the furlough scheme was supporting some people whose jobs were effectively redundant.
He believes the emphasis should have been on rewarding employers bringing furloughed workers back into full-time employment by use of the job retention scheme, which was overtaken by the extension to furlough.