Sacha Lord, the Night Time Economy Adviser for Greater Manchester, has warned today that pints and food prices in Britain’s pubs are likely to rise from 1 October, in line with the government’s rise in VAT for the sector.

The price of an average pint in England is predicted to rise by 25p to £3.94, while the average glass of wine is likely to shift from £4.07 to £4.35, to cover overall losses felt by operators. The prediction comes as national pub chain JD Wetherspoon announced it will increase the prices of its meals by around 40p from 1 October.

Pubs, restaurants and bars have benefited from a 5% VAT rate since 15 July 2020, when Chancellor Rishi Sunak dropped the rate from 20% to help the beleaguered sector through the crisis. From 1 October, the rate will rise to 12.5%, before moving back to the full 20% rate from 31 March 2022.

Today, Lord has urged the Government to rethink the increase, calling for the move to be delayed until the industry recovers to pre-pandemic levels.

As one of the hardest hit sectors, the value of the UK pub market declined 61.9% in 2020, down £13.9bn year on year*. On average, 37 pubs closed down per week in 2020 and the market is only expected to recover to two thirds (64%) of its pre-covid value in 2021*.

Lord, who has campaigned for the sector throughout the Covid-19 pandemic, said,

“The 5% VAT rate was the single biggest recovery measure for the industry over the past 18 months, and has enabled venues to stay in business and staff to keep their jobs. Removing this relief will have a severe effect on operators across the country. VAT is the biggest expense in any business, and it is the quickest way to reduce cash flow. For businesses who have little-to-no cash reserves as a result of the pandemic, it could be last orders.”

“Many operators will be forced to pass the increase onto the customer to stay afloat, and we could see prices across food and drink rise by as much as 7-10% from October as bosses attempt to recover losses and fight the dire financial situation they find themselves in.”

He continues, “The reduced VAT rate is an essential measure to keep the wheels turning and staff in jobs. Combine this with rising inflation, the upcoming removal of furlough, the ongoing worry of re-introduced Covid measures and this week’s concerns over energy pricing, and we have a tough winter ahead for our nightlife secto. I expect we’ll almost certainly see many more venues close for good.”

“Operators will take at least three years to recover from this pandemic, and I urge the Government to rethink this rise and extend the current rate until that point. The hospitality industry is vital to the UK’s recovery and growth. Cancelling a measure which will result in venues closing, staff being made redundant and VAT bills left unpaid through bankruptcy will only hinder, not help the economy. To punish the sector now will have devastating consequences just as it starts to recover.”

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