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Morning Briefing for pub, restaurant and food wervice operators

Thu 7th Mar 2024 - Opinion Special: A cut-and-paste Budget

A cut-and-paste Budget by Kate Nicholls

I’ve heard the chancellor say it is not governments that create dynamic economies and growth but businesses and people, a sentiment with which I wholeheartedly agree. Unfortunately, the Budget he delivered yesterday (Wednesday, 6 March) was a complete missed opportunity to empower hospitality and its people to do just that. 

Our own industry has proved time and again that it can deliver growth rapidly and at scale, but with very little in meaningful support to help us with the continuing soaring costs and difficulties of doing business, it is difficult to see how we are going to achieve it this time. The coming months will become even more challenging, with increases in the national living wage and business rates arriving in just under a month, ramping up business costs yet again. 

Despite our best efforts, the chancellor did not demonstrate that he understands the genuine pain operators are enduring and the scope and scale of what we bring to communities and high streets. He had a chance to accelerate and unlock hospitality, to save the many businesses that now face shutting their doors for good, and to save the thousands of jobs they support. Instead, he delivered a cut-and-paste Budget, maintaining the status quo that continues to act as a drag on recovery.

The entire sector was united behind our asks to lower the rate of VAT, cap business rates increases and reduce jobs taxes. We have worked, and continue to work, tirelessly to get the sector’s needs heard by politicians at the very highest level, across all parties. 

Our open letter to the chancellor was signed by more than 100 chief executives from across the sector, from large pub groups to local community venues. Our asks were supported by MPs from across the political spectrum, and consumers are on our side too. Recent research conducted in partnership between ourselves, CGA by NiQ and Zonal showed an overwhelming majority of people (74%) believe hospitality needs and deserves support from the government.

They also agreed that the sector plays an important role in its communities (64% said so in the same survey). Unfortunately, for many, those venues have gone now – 6,000 licensed premises shut their doors for good last year alone, and yesterday’s announcement means that more will meet the same fate. That’s what makes the lack of action to support our hospitality venues from the chancellor so infuriating. 

We need a new approach from government. The current plan to help businesses is not working and we urgently need bold action. That’s what we proposed ahead of the Budget, arguing strongly for a lower rate of VAT, which would have been the single biggest shot in the arm for businesses, the economy and consumers alike. It would keep prices down, stimulate demand, create jobs and help the economy grow, as well as making us much more competitive with European competitors.

Our sector is a leading UK employer, providing work to more than 3.5 million people, and contributing more than £93bn to the economy each year. It not only deserves the support we have been collectively asking for, it very clearly needs it. The chancellor missed a huge opportunity yesterday, and unfortunately, hospitality businesses big and small will be the ones paying the price.
Kate Nicholls is chief executive of UKHospitality

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