Chancellor Rachel Reeves delivered the Spring Statement on March 26, 2025, outlining measures aimed at stabilising the UK’s public finances amid global economic uncertainties. The statement includes several key points relevant to the hospitality sector:
Economic Growth Forecast
The Office for Budget Responsibility (OBR) has revised the UK’s economic growth forecast for 2025 down from 2% to 1%, reflecting challenges such as rising borrowing costs and sluggish economic performance.
Welfare and Public Spending Cuts
To address the fiscal deficit, the Chancellor announced significant cuts to welfare spending, including a £3.4 billion reduction in the welfare budget and the elimination of at least 10,000 civil service positions. These measures aim to reallocate funds to essential services like policing.
Alcohol Duty Freeze
In a move welcomed by the hospitality industry, the Chancellor confirmed that alcohol taxes will remain unchanged, providing relief to both consumers and pub landlords. However, it’s important to note that alcohol prices may still rise due to earlier tax measures.
National Living Wage Increase
The statement announced an increase in the National Living Wage, benefiting low-paid workers. This change is set to take effect from April, aiming to improve the standard of living for many in the hospitality sector.
Industry Response
Despite these measures, industry leaders have expressed concerns over the lack of targeted support for the hospitality sector. Kate Nicholls, CEO of UKHospitality, described the statement as a “missed opportunity” to address the impending tax increases facing the industry, which could lead to job losses and business closures.
While the Spring Statement includes measures such as freezing alcohol duties and increasing the National Living Wage, the hospitality sector continues to face significant challenges. Industry leaders are advocating for more comprehensive support to ensure the sector’s stability and growth in the coming years.
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