Rachel Reeves’ Budget tax raid could add a further 5p to the price of a pint
THE Chancellor’s Budget tax raid could add a further 5p to the price of a pint, undoing her claim to be knocking a penny off.
Pub chains will be forced to increase prices to offset Rachel Reeves’s blow from hiking employers’ national insurance contributions and minimum wage bills, according to analysts.
The Office for Budget Responsibility also told MPs yesterday that the move to make staff more expensive would have the impact of reducing the level of employment by 50,000 people.
This is more than the entire workforce at Wetherspoons.
Pub chains will be hit hard from the increase with Greg Johnson, analyst at City broker Shore Capital, predicting that the national insurance contributions could “add a further 5p to a pint” .
He said that staffing costs are equivalent to a quarter of pub chain’s revenues and the Chancellor’s changes will mean they will rise by 10 per cent.
Mr Johnson added to warnings the cost burden will lead to pub closures saying “ultimately we expect the hospitality market will emerge smaller than it could have been”.
Wetherspoons is expected to face a £35 million extra hit while Mitchells & Butler, the owner of All Bar One and Toby Carvery, will face a £40 millon hit, according to the analysis.