Spring Statement 2025: ‘Missed opportunity’ to avoid hospitality cliff edge
The UK’s leading hospitality body has slammed the Spring Statement as a ‘missed opportunity’ to solve the mounting crisis in Britain’s pubs and bars.
The statement contained no phasing in of higher national insurance contributions (NICs) or extra support for the sector, despite pleas from the industry.
“Growth won’t just happen without a plan. Today’s statement was yet another missed opportunity to avoid an April cliff edge which will level a devastating £3.4bn annual increase to the sector’s tax bill,” UKHospitality boss Kate Nicholls said.
The government will increase the amount of tax employers pay on staff wages from 13.8 per cent to 15 per cent, and reduce the threshold at which employees’ wages are eligible for the tax from £9,500 to £5,000 per year.
A group of trade bodies tried to delay changes to NICs earlier this year.
“If it doesn’t act then businesses are clear that the impact on communities, employees and supply chains will be significant,” UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster said.
Hospitality was the biggest driver of economic growth in both November and December, but tax rises in the October budget “halted and reversed a year-long upgrade cycle”, Peel Hunt said.
“If the Government is serious about getting Britain working, it needs hospitality. When we were backed after the financial crash and the pandemic, we proved how we can help drive economic recovery.
“There is still time for the Chancellor to act and avert this disaster. Now is the time to back hospitality, delay the changes to employer NICs and work with us,” Nicholls said.
Emma McClarkin, CEO of the British Beer and Pub Association, offered a similar analysis.
“The Spring Statement was the perfect chance to sow the seeds of growth but Government missed the opportunity, has not listened to business, and we can now expect to see prices rise, jobs at risk, and growth downgraded.
“For a Government whose mission is growth, there is an alarming lack of a plan to boost the economy, given they’ve buried brewers and pubs under mountains of regulations, rates, and taxes.”
The BPPA predicts the sector will face an additional £70m per month, the equivalent of 5,700 jobs per month.
No change to business rates
Hospitality and retail analysts were disappointed at the lack of changes to the UK’s heavily disliked business rates system.
Instead, Reeves said that the government will publish an interim report in summer that sets out a “clear direction of travel for the business rates system”, with further policy detail to follow at the Budget this autumn.
“While it is positive that the Government is currently looking at an overhaul of the system, with the potential for two lower rates being introduced from 2026, time is a luxury that most small businesses do not have. They are struggling now, and it is disappointing to see little news from the Government on this front today,” Matt Dalton, Consumer Sector Leader at Forvis Mazars, said.
“The retail sector has faced numerous headwinds over the past few years, with a further blow coming in April as rates relief for retail, hospitality, and leisure sectors decreases.
Helen Dickinson, Chief executive of the British Retail Consortium (BRC) said that despite the Chancellor’s committment to “tearing down regulatory barriers and implementing policies to grow our economy and create jobs”, higher taxes mean “higher prices, fewer shops and less investment in jobs”.
“The costs from the Budget, and uncertainty about how the Employment Rights Bill and new business rates policy will be implemented, mean it will be much harder for retailers to keep creating [retail] jobs.
“The government should avoid unintended consequences and provide clarity about the implementation of these policies as soon as possible. A serious plan for retail growth would support the industry to invest in new jobs and keep prices down for customers.”