A fish and chip dinner could soon cost more than £20, with chippies warning that their prices will rise by more than 50 per cent in the next few months.
It comes as takeaway restaurant owners criticized the lack of support for small businesses in today’s mini-Budget and pleaded with the Government to help their struggling industry.
Speaking in the Lower House of Parliament this morning, Chancellor Kwasi Kwarteng proposed a raft of new tax-cutting measures.
And among the eye-catching predictions was the decision to set corporate tax at 19 percent while capping the basic rate of corporate income tax at the same low figure.
But Steven Dhillon, whose family owns the award-winning Fisherman’s Bay Chips in Whitley Bay, said the measures would do nothing to help his business, which is struggling with rising fish, oil and energy costs.
“We have to raise prices,” Mr Dhillon said. ‘However, we also take a lot on our shoulders. We can’t handle everything, as we attract a lot of repeat customers, and we’re also already noticing that fish and chips is becoming a less common meal. It’s becoming a once-in-a-blue-moon treat.”
He said a standard fish and chip dinner, which cost around £8 a year ago, has now risen to £10.20. He fears they may have to raise the price to as much as £16 by January.
Steven Dhillon, whose family owns the award-winning Fisherman’s Bay Chips in Whitley (pictured), said the price of a standard fish and chip would have to rise from £10.20 to as much as £16 by January due to rising costs.
With many places in the capital already charging £15 for a standard fish and chip, a 50% rise could see Londoners paying upwards of £20 within months.
Andrew Crook, president of the National Fish Fryers Association, today slammed the government for helping “bankers not bakers and financiers not fish fryers”.
Reflecting on today’s announcements – which included a pledge to end caps on city bonuses – he said the budget “completely missed the mark”.
Mr Cook said: ‘This was an opportunity to take the pressure off small businesses because for us this is not just a job, it’s a way of life.
“But they have completely missed the mark with this budget.
Fish and chip shop owners today criticized Kwasi Kwarteng’s mini-budget for not doing enough to support the struggling industry (photo)
“The entire hospitality industry was looking for VAT reductions and reforms to ensure changes to the system in the future, but we did not achieve them.
“And unfortunately they catered to bankers rather than bakers and financiers rather than fryers.”
Mr Cook, who also owns the Skippers chip shop in Euxton, Lancashire, said he still hoped the Government would offer more help later this autumn.
Andrew Crook, president of the National Fish Fryers Association (pictured), criticized today’s announcements and said they failed to ease the pressure on small businesses
But he worried that many chip shop owners would be stuck in the winter after the price of cod jumped by 75 per cent in addition to rising bills.
He said: “It’s easy for bigger companies to acquire businesses and expand, but we can’t. We just keep our heads above water.
‘I was looking forward to planning the promotion to help lift the industry from where it is now, but we are now looking at a bleak period after Christmas.’
Richard Coleman Ord, 29, who is the fifth generation in the family to run his family fish and chip shop, said the budget was ‘nowhere near’ what was needed for the industry.
He said: ‘For small businesses this is disastrous. I think there was a lot of emphasis on big companies and growing the economy through them.
“But in general, for smaller companies, we’re pretty lonely. We were very disappointed.”
He added: “It’s fine to cut tax rates but you have to make money to pay the taxes and there are a lot of us who won’t be in business much longer.
“It’s really very serious out there and we need help for a small family business. We are not receiving them at the moment.”
Mr Coleman Ord said he was lucky his chip shop Colmans in South Shields had an energy price plan in place for the next 18 months.
However, he said that due to rising ingredient prices, trading was still extremely choppy amid the cost of living crisis.
He said: ‘The prices of potatoes, fish, oil and all raw materials have risen beyond our wildest dreams – even though we’ve been in business for 60 years.
“The only way to make up for it, including energy, would be to cut VAT and business rates like they did for the pandemic.
“The same should apply to this crisis, because to be honest with you, it’s worse than a pandemic. It’s much more serious for businesses than the pandemic was.”
Mr Coleman Ord also said the measures announced by the Government to lift the cap on bank bonuses had left a “bad taste” in the mouths of many small businesses.
He said: ‘It leaves a bad taste in people’s mouths.
“I understand the thinking behind it – to bring growth to certain sectors – but again it’s targeting large companies and higher earners.
“For most people who are looking for relief and help – if anything – it feels a bit thrown in your face, and we feel disappointed.”
The chancellor’s announcement that he would lift the cap on bank bonuses was one of the most politically controversial aspects of his mini-budget.
Current rules mean bonuses can’t be more than twice salary – which critics say drives the best talent away from the city.
Abolishing the cap was proposed when Boris Johnson was Prime Minister before it was dropped amid fears over optics during the cost of living crisis.
But Mr Kwarteng said all this did was drive up wages and hamper London’s ability to compete with Paris, Frankfurt and New York.
The chancellor also announced this morning that he is scrapping the 45p tax rate for around 660,000 people earning more than £150,000 – saving them an average of £10,000 a year each.
The extra rate will be removed from April and means that all annual income above £50,270 will now be taxed at the current higher rate of 40%.
Mr Kwarteng’s changes to income tax rates next year will see those earning £20,000 a year save £74.30, while those earning £50,000 will save £174.32 and those on £200,000 £2,877.
In addition to the income tax cut, the Chancellor also confirmed today that he is scrapping the increase in National Insurance contributions to further encourage employees.
The 1.25 percentage point increase was introduced in April by former chancellor Rishi Sunak. However, it will now be reversed from November 6.
Quick: What did the chancellor announce?
From April next year, the 45p tax rate paid by those who earn more than £150,000 will be abolished.
Cost per year: £2 billion
A 1p cut in the basic rate of income tax brought forward by one year to April 2023
Cost per year: £5 billion
There is no stamp duty on property purchases up to £250,000 and up to £425,000 for first time buyers
Cost per year: £1.5 billion
Reintroduction of VAT-free shopping for overseas tourists
Cost per year: £2 billion
Alcohol duty frozen from next year, priced at 7p per pint of beer and 38p per bottle of wine
The increase in national insurance contributions will be canceled from 6 November
Cost per year: £15 billion
Canceling next year’s planned rise in corporation tax, leaving the levy at 19%
Cost per year: £18 billion
Companies based in 38 new ‘investment zones’ will see tax cuts and benefit from repeal of planning rules
Price per year: Not specified
Removing the cap on bankers’ bonuses in a bid to strengthen the city
Cost per year: Nil
Total cost per year with other measures: £45 billion
Mr Kwarteng is also scrapping the planned Health and Social Care Levy – a separate tax due to come into force in April to replace this year’s rise in National Insurance.
The Treasury estimates this will benefit 28 million people in the UK, saving around £135 on average.
The levy is expected to raise around £13 billion a year, although the chancellor today promised to keep NHS and social care funding at the same level as planned.
Mr Kwarteng told the House of Commons that his tax changes were part of a “new approach for a new era” as he and Ms Truss sought to “unleash the enormous potential of this country”.
He claimed the cuts would mean Britain has “one of the most competitive and pro-growth tax systems in the world”.
In the ’emergency budget’, the chancellor also confirmed a ‘guaranteed energy price’ to limit electricity and gas costs for households.
This means typical household energy bills will be frozen at £2,500 for the next two years.
Stamp duty is waived for values up to £250,000, with first-time buyers exempt from paying up to £425,000 – taking a total of 200,000 people out of the system.
Duty rises on beer, wine and cider will be scrapped – in a bid to boost overseas tourism, visitors will be able to shop VAT-free.
Dozens of low-tax, low-regulation ‘investment zones’ will be created across the country, with new start-ups enjoying benefits such as exemptions from business taxes.
Mr Kwarteng stressed that there was a long-term challenge in Britain that needed to be tackled.
“Growth is not as high as it should be,” he said. “We are determined to break this cycle. We need a new approach for a new era.”
But he faced questions tonight as economists raised concerns about the huge borrowing that will be needed to cover the hole in the government’s books, with forecasts that the annual deficit could now reach £190bn and remain high for years to come.
And consumer money expert Martin Lewis described the government’s financial plan as “stunning” after Chancellor Kwasi Kwarteng’s so-called mini-budget was released.
“This was a truly stunning statement from a Conservative Party government,” he tweeted.
‘Massive new borrowing amid tax cuts. Everything is aimed at growing the economy. I really hope it works. I’m really worried about what will happen if it doesn’t.”