Budget Reaction

Feels more like a political blog right now, than an industry blog. That is largely because there is so little happening within the industry right now. The hatches are battened down and as long as England keep winning and the good weather hold things don't seem to be getting significantly worse at the moment, which makes a nice change.

As to the 'Emergency Budget' - in short - not as bad as I expected.

I don't think anybody really believed that VAT was going to stay at 17.5%, it was either that or income tax that had to produce the big savings, and at least VAT is across the board. Sure it's going to hurt in January when we all have to put 10p on the pint, but it will not be the pub industry alone, everyone will be doing it and it'll hurt much more in other areas, after all our punters are used to drinks costs rising on a regular basis and will soon get over it. I don't think this can be said for many other industries.

The good news was that duty was left alone - I almost fell out of my chair at that one. It's been the whipping boy of the treasury for so long that it was expected rather than feared. And better still, the insane 'cider tax' has been withdrawn, so all you westcountry and kentish men can breathe a sigh of relief.

Other good news was no increase in NI, and a rise in the threshold. This won't make a huge difference but at least the cost of staffing your business has not been bumped again. The 'jobs tax', as it got christened, would have been disastrous - putting up our major cost disproportionately.

In brief, although the general outlook for the next few years remains gloomy, it has got no gloomier for the pub industry than it has for the rest of the economy, which is a pleasant surprise. Everybody needs to tighten their belts and disposable income will drop all around, but people will still find a couple of quid here and there for a drink. It is, after all, the British way.

As an aside: for those of you not as adept with figures who want to know what the increase in VAT will mean to them in real terms, there is a free Gross Profit Calculator located on our main web site located here. Just go to the 'Free Stuff' tab and download it. I will shortly be updating in to display the GP and required pricing at both 17.5% and 20% VAT so that you can see the difference in real money.