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Catch up with the latest developments involving BII licensee support, taking member statistics to the heart of Government, and interviews with CEO Steven Alton.

Hospitality businesses can be at the heart of economic growth, but further support from Government will be critical to their survival

Leaders of trade bodies representing pubs, brewers, bars, restaurants, hotels and consumers have written to the Chancellor following the mini-budget last week, highlighting the urgent need for further support to safeguard hospitality businesses
In the letter to Kwasi Kwarteng, representatives from across the hospitality industry thanked the Chancellor for his support following the business energy price guarantee, as well as his recognition that energy was not the only challenge to growth.

They also recognised the positive approach he plans to take to reduce the huge burden of excessive business regulations and welcomed the freeze to alcohol duties.

They warned however, that these measures were simply not enough to safeguard the future of the sector. The combination of pandemic specific debts, minimal cash reserves, ongoing staffing issues and escalating inflationary costs across all areas for hospitality businesses, all against a backdrop of the cost-of-living crisis, was having a devastating impact.

In particular, small hospitality businesses operating at the heart of every community in the UK now face the biggest threat to their survival.
In the letter, the trade associations called on the Chancellor to recognise the vulnerability of the sector by providing urgent support in two key areas:
An immediate reduction in the headline rate of VAT for hospitality on all food and drink sales
Cancellation of business rates for the remainder of this financial year

In a joint statement the industry leaders said: 
“Whilst the announcements made in the mini-budget will go some way to supporting our sector, the stark reality for many businesses is that they will still be facing energy costs of at least double those of 2021. At a time where crippling inflationary pressures across all areas of their businesses are already threatening their survival, this is not sustainable.

Targeted support for hospitality businesses at the heart of their communities in villages, towns, cities and high streets across the UK will now be critical to ensure they can play a key role in the Government’s growth and levelling up agenda.”

“We need a plan for wide-ranging support that is in place for more than six months, allowing these businesses time to plan for their futures. The current uncertainty facing hospitality businesses is a huge barrier to growth and the immediate support we are calling for will give many the breathing space they need to ensure their survival past this winter.”

Read the full letter here

BII responds to Prime Minister announcement on energy costs

Today’s announcement on the 6 month equivalent match to the domestic energy price guarantee, capping energy costs for small businesses is a welcome acknowledgement of the crippling effect of energy bills on our pubs in every community. However, it is only one element of an overall package of support that will be needed to safeguard these essential local businesses. The British Institute of Innkeeping (BII) remains gravely concerned for the future survival of its members’ pub businesses.  
 
Steve Alton, CEO of the British Institute of Innkeeping (BII) commented:
 
“We have left Government in no doubt about the crushing impact of energy costs on our members’ pub businesses and we are pleased that this has been specifically recognised in today’s announcement.  Beyond the impact of energy, pubs across the nation have seen their long hoped for recovery stopped in its tracks by chronic staff shortages, repaying pandemic specific debts, a crippling rise in the cost of doing business through inflationary rises and a squeeze on consumer spending, with many pubs already loss making.
 
“Escalating energy costs have rendered long-standing essential local businesses simply unviable.  We await the detail on how this price guarantee will be applied for our nations’ pubs and the impact that this will have on their survival. Today’s announcement looks to tackle the specific energy issue and we look forward to again working closely with Government to urgently deliver the wider package of investment that will be needed to allow our members to trade through these exceptional challenges and be at the heart of growth in our economy.”

Rapidly escalating energy bills are killing our nations' pubs 

The British Institute of Innkeeping (BII) has today written to the Secretary of State for BEIS and the Chancellor, highlighting the devastating impact of the energy crisis on its members running independent pub businesses and calling for urgent, essential support from Government.

Licensees across the UK are dealing with a lethal cocktail of inflationary costs, staff shortages and squeezing of consumer confidence, all whilst trying to recover from the devasting impact of the pandemic.  

In a recent survey of members, the BII revealed that the rising energy costs topped the list of factors impacting the profitability of their pub businesses, but in the few short weeks since then, the crisis has escalated even further.

Unlike the increases in energy bills for the public, there is currently no cap in place for businesses, and many BII members are regularly reporting increases of 300% or more on their existing payments. Even without the crippling inflation across all other areas, the energy crisis alone is threatening the survival of great pub businesses that have been at the heart of their community for years.  

Independent pub operators will need to trade at least 20% higher than pre-pandemic levels to just stand still, but 3-in-4 are still trading below 2019 levels, with 86% reporting lower profits from that already reduced revenue. In addition, many are still repaying Government Bounce Back loans and other pandemic specific debts at an average of around £40,000 per pub.  

Steve Alton, CEO of the BII said:

“Our members have been working tirelessly to maintain pubs as accessible and affordable safe spaces for all, at the heart of their communities across the UK, absorbing as much of the inflationary costs placed on their businesses as possible. We have seen a sharp rise in calls to our helplines, with members uncertain of how to navigate the challenges facing them, the majority of whom are seeing unsustainable cost increases across every area of their businesses, but rising energy bills are the top concern at the moment.

Even at the height of summer, the busiest time of year for pubs, licensees are now seriously considering the sustainability of their businesses, as the astronomical rising cost of business is undermining any recovery they may have already made. To be clear, the huge impact of rising energy bills alone will be enough to destroy many of these much loved and needed small businesses, providing vital social connection for so many.

“The crisis now facing our members is just as damaging as the impact of the pandemic. Without support, the rise in energy bills and further cost increases will cripple these viable businesses, risking lost jobs and careers, Government loans being written off, and the loss of essential, accessible places that connect us all in our communities.

“We have called on Government for urgent short-term support to allow these vital businesses, supporting local jobs and livelihoods in every community, to weather these exceptional costs of doing business. They now urgently need immediate support with energy bills via grants and a cap on future increases, alongside a waiver of business rates for 23/24 as well as a more meaningful cut to the differential rate of duty on beer applied to smaller container sizes. Alongside these measures, there need to be measures in place to stimulate consumer spending, all of which will allow them time to start their recovery. 

“Pubs are an essential component of growth, regeneration and levelling up across the UK and without support, their contribution to skilled jobs, local investment and supporting local suppliers will be lost, in many cases, forever. Government must act now to ensure the survival of these vital community businesses.”

Read the letter to the Secretary of State and the Chancellor here

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