Foodservice industry reacts to autumn budget

30/10/2018 - 09:26
Chancellor Phillip Hammond announced the UK Autumn budget yesterday (29 October), which included a tax on plastic packaging that does not contain at least 30% recycled material.

It also included cuts to business rates, a reduction to the costs of apprenticeships, with the government committing a 95% contribution for non-levy payers, and a 2% digital services tax on UK revenues of big technology companies.


UKHospitality chief executive, Kate Nicholls, said: "This was a positive Budget for hospitality, recognising and acknowledging our core campaigns around employment costs, business rates and digital paying its fair share – together with a positive outcome on excise duty, latte levy and non-residential capex and investment allowances. We estimate the measures announced in the Budget as a result of our campaigns are likely to save the trade £750m.

“Hospitality businesses have been devastated by spiralling business rates costs, so steps to address this are welcome. UKHospitality has exhaustively campaigned for support for the sector on business rates, so it positive to see the Government listening.

“Cutting bills for smaller businesses by a third will provide some much-needed support and is a positive move by the Government. This, along with the introduction of a new tax on digital businesses, to ensure they pay their fair share, needs to be a springboard for further businesses rates reform.

“The funds raised by this new tax should be used to ease the unfair tax burdens being shouldered by hospitality businesses to help stop the continued devastation of high streets. If the Government is serious about updating the rates system then we still need to see a thorough, root and branch reform of the whole system to ensure it is fair and fit for purpose in the 21st Century.

“Reducing the cost of apprenticeships for SMEs is a pragmatic and positive step towards tackling recruitment and retention problems being faced by businesses.

“The hospitality sector has already taken, and continues to take, effort to tackle plastic waste and UKHospitality has been working with its members and the wider sector to help drive this. As the Chancellor rightly said, a latte levy would not necessarily help tackle waste but would increase costs for businesses and, ultimately, consumers. Avoiding this unnecessary additional tax is very welcome.

“A freeze in the rate of beer, cider and spirits duty, something we have continually called for, will also help avoid an additional squeeze on the hospitality sector.

“The Chancellor has taken some positive steps to reassure and support hospitality businesses during uncertain political and economic times. We are now calling on the Government to follow this positive Budget with continued support for businesses, as we close in on our withdrawal from the EU.”

Food and Drink Federation 

Ian Wright, Food and Drink Federation (FDF) chief executive, said: “Food and drink manufacturers – 97% of whom are SMEs - will welcome the Chancellor’s announcements today on productivity, exports, infrastructure, enterprise, business rates, investment and entrepreneurs. 

“FDF is particularly pleased to see our representations on the way the Apprenticeship Levy operates have been listened to and acted upon.

“While we are committed to reducing packaging waste and working with Government, today’s new tax on plastic packaging will result in significantly increased costs for UK food and drink manufacturers, due to the input costs required to produce food-grade recycled packaging.

“However the shadow of Brexit, and in particular a ‘no-deal’ Brexit, hangs over the food and drink industry and gets darker every day. While that remains the case, it is hard to see how we can long continue with business - or politics - as usual.” 

HIT Training 

Jill Whittaker, Managing Director of HIT Training, said: “We are delighted that the Chancellor has chosen to reduce the cost of apprenticeship training for non-levy payers, with the government now committing to a contribution of 95% and employers paying the remaining 5%. This means, for example, that the cost to an employer of training a commis chef or chef de partie reduces from £900 to £450, and for a team leader from £450 to £225.

“In the current economic climate any additional costs to businesses are tough, but the value that an organisation can get from well-trained employees delivers in so many ways – reduced staff turnover, increased productivity, less waste and improved job efficiency. We hope that today’s news will mean that SMEs – many of which stopped taking on apprentices when the Apprenticeship Levy was introduced – will come back to apprenticeships as an effective and beneficial way to train their staff and improve their businesses.”

Anerobic Digestion & Bioresources Association 

Charlotte Morton, Chief Executive of the Anaerobic Digestion & Bioresources Association (ADBA) said: “We were disappointed that the Budget did not confirm a commitment to introducing universal food waste collections in England or any further funding support to encourage local authorities to introduce these where they haven’t already done so.

“We strongly urge the Treasury, BEIS and DEFRA to ensure the forthcoming Resources & Waste Strategy includes these measures to help end the scandal of valuable organic materials being wasted in incineration or landfill - meeting our Carbon Budgets depends on it. As highlighted by the Committee on Climate Change, we also need urgent action on replacement for the Renewable Heat Incentive by the end of the year to ensure that generation of renewable heat continues to receive government support.

“ADBA welcomes the confirmation that Ministers will maintain the difference between alternative and main road fuel duty rates until 2032 to support the decarbonisation of the UK transport sector – this recognises the valuable role that clean fuels such as biomethane need to play.”

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