Clive Price has slammed Rachel Reeves’ Budget measures (Image: Barons Pubs)
The director of a chain of has railed against Labour’s Budget tax rise, saying he will be forced to pay ‘beyond £1million’ a year and employ 15 to 20 per cent fewer people next year as a result.
Clive Price, 52, oversees 500 employees and has been in the business for 24 years. He currently manages 10 Barons Pubs venues in Surrey – a branch of Greene King.
He told that there is a risk that some could have to close after the Chancellor of the Exchequer, , announced a hike to employers’ national insurance payments on October 30.
The increased levy and a higher minimum wage means that the chain will have to pay out an extra £2,500 per employee for a 38 hour working week over the course of a year. The level at which employers become liable to pay national insurance on each employee’s salary is set to reduce from £9,100 per year to £5,000 per year.
Mr Price added that the Government’s promise to take a ‘penny off a pint’ – Ms Reeves announced a 1.7 per cent reduction in alcohol duty on draught beer and cider – was a ‘smoke screen’ and an ‘insult’.
The hospitality boss described the measure as the equivalent of ‘letting down your tyres and handing you a hand pump expecting you to be grateful.
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Rachel Reeves announced an increase in employers’ national insurance contributions on October 30 (Image: Getty)
Instead, he called for a 10 per cent cut to VAT on food to bring British rules in line with those in Europe. He would be ‘happier to pay’ corporation tax’, as that would mean ‘you’ve actually made a profit’.
Mr Price said: “The hospitality industry is the third biggest employer in the country. We give so many young people their first jobs.”
He added that the extra bracket of pay not only ‘captures’ his new part-time employees that weren’t captured before, but now also includes all the people that are already working for him.
Mr Price also said that ‘absolutely, without a shadow of a doubt’ some pubs across the country will have to close their doors as a result of the changes as industry experts predict that ‘one in four’ will fail.
He added: “The Chancellor’s assumption that all these companies sit there with lots of profits that they’re able to pay these extra costs from just isn’t true, and especially in the pub world.
“So many pubs survive on the good will of mister and missus that are running it who are already pushed, stretched, working long hours, just about making ends meet.”
This includes himself, he said, as he finds running his business currently ‘extremely stressful’ managing a ‘small margin business’ dealing in ‘single per cent’ profits.
Pubs are bracing for a tax increase and minimum wage rise (Image: Getty)
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On the ‘penny off pints measure’, Mr Price said: “For it to get a cheer in the House of Commons is just so insulting.”
He then detailed that suppliers will increase their prices by three, four or five per cent annually anyway, and there is a cost to selling beer.
Greene King CEO Nick Mackenzie said: “The decisions taken in the Budget have hurt pubs at a time when the cost of doing business was already at an all-time high.
“Increasing taxes and wages without a clear plan to reduce regulation and costs will inevitably impact on investment and could mark a moment of lasting damage to the pubs industry.
“To prevent this, we need the Government to introduce their promised reform to business rates to provide urgent relief for the UK’s locals.”
Nick Mackenzie is Greene King’s CEO (Image: Greene King)
Reform UK London Assembly Member Alex Wilson said: “Pubs are at the heart of any successful community, but here in London pubs have already been closing faster than anywhere else in England.
“Rachel Reeves’ poorly thought-out budget will deliver yet another blow to an industry still reeling from the devastating impact of lockdown and lack of support from London’s Mayor and local authorities.
“The 1p cut in draft beer is a smokescreen – the real cost of this budget with its National Insurance hike and business rates cash grab will put many pubs at risk of closure.
“Labour claims to stand up for working people but it’s young and part-time workers who will bear the brunt of this pernicious assault on the hospitality sector. Only Reform UK will put ordinary hard-working Londoners first.”
Liberal Democrat Treasury spokesperson MP said: “Pubs are the beating heart of our communities, providing a social hub and sense of identity.
“That’s why the thousands of pub closures in recent years is a travesty and why we must do everything to save these important symbols of British culture from being lost.
“Instead of supporting our pubs, the new government has inexplicably opted to hit them once again with even higher taxes which will only make these financial struggles worse.
“The new government needs to rip up the broken business rates system completely and start again with a new reformed system that will actually support our pubs instead of putting them at risk of closure.”