John White: I can’t believe that everyone in the Treasury is so economically illiterate not to know that without the supply chain you have no business

Bacta CEO John White takes some questions on the 2021 Budget.

Q: The industry call for MGD hasn’t resonated with the Treasury. What impact will this have?

John White: A tax cut on MGD was always close to impossible to achieve. Ministers had been telling us for months that it wasn’t going to happen. Nevertheless it is the principle tax on the AGC/Pub side of the business and as such represents a significant burden when you can’t claim back VAT, the tax we were told it was to replace on a fiscally neutral basis.

We will need to focus on this in the next budget. Any cost is clearly going to eat away at revenue so it will hamper the recovery. If we could even have had a 5 percent cut that would have gone straight to the bottom line and helped businesses weather the early stages of recovery.

We were more optimistic that the Chancellor would ditch his hypocrisy on VAT. Still a very tough ask but having said, and confirmed yesterday, that tourism businesses need extra support, to ignore one of the key drivers of economic activity at the coast, doubled down on the failure of his Department to do the right thing for the country and for the industry.

It is hard to fathom why something so obviously right, was considered and rejected.

Q: What next for the supply chain? How are they going to navigate their way through the summer and into next year and will we see staff released now rather than later?

JW: There was not one word in the budget about supply chains. There seems to be blind spot about their importance to any economy and to the recovery in particular.

I can’t believe that everyone in the Treasury is so economically illiterate not to know that without the supply chain you have no business.

They provide the goods and services that the customer is going to want. If that’s not there then you can envisage over-trading and cashflow problems.

Supply chains lubricate the delivery of goods and services through credit. That simply won’t be there if they are not there or they have taken such a hit through the pandemic.

Our supply chain is under such a strain and will I am sure have to let staff go as even with CJRS there is an employment cost they have to cover.

I would encourage all members to talk to their suppliers and find creative ways to support them through to and beyond re-opening. We don’t won’t any of them to go bust. The super-deduction should help machine investment.

Q: The seaside operators are responding positively to the budget – they clearly have their eyes set on a strong summer. Do you foresee any stings in the tail in the budget for them?

JW: The Chancellor has been pretty clear. Wading through the detail in the post-budget paperwork I don’t see anything that sets a trap for us.

I think the expectation is that the public will want to get out and about when they are allowed to which should drive increased footfall at the coast. We will likely still need to keep some Covid-secure measures in place but even so I am likewise hoping for a good summer. There is no doubt we need it.

Q: All the hospitality and retail benefits on offer such as business rates – who in the industry will benefit, and what can you do for the ones left out?

JW: The FEC and AGC operators (in England) will continue to get the rates relief and the RLH grants. Our supply chain members have not and do not.

As I said – I don’t get this. Any reference to the supply chain in the post-budget paperwork leads back to discretionary grant funding, which we know is patchy and woefully insufficient.

Bacta will keep making the case, especially to our new Minister, John Whittingdale.