Hoteliers in Bristol hope this month’s budget – coming the day before Halloween – is not the stuff of nightmares for struggling hospitality businesses.
During the summer Prime Minister Sir Keir Starmer warned that Labour’s first budget since coming to power in July would be “painful” due to his government inheriting an ‘economic black hole’, claiming the Conservative Party had created a £22bn gap in public finances.
Members of the Bristol Hoteliers Association (BHA) are now anxiously awaiting the 30 October budget while keeping their collective fingers crossed that Chancellor Rachel Reeves will be able to give them something to smile about.
BHA Chair Raphael Herzog said:
“In last year’s autumn statement and the spring budget in April, we felt very let down by the continued lack of support for the hospitality sector.
“In their manifesto, Labour promised to reform the business rates system in England and we are behind UK Hospitality, who are calling for the new Government to deliver on that pledge.
“Business rates reliefs end next April as things stand which will mean businesses having to pay full rates, which effectively means their business rates bills could quadruple.
“UK Hospitality has proposed a new, lower, permanent and universal business rates multiplier for the sector, which will provide more business certainty and stability, rather than the uncertain annual reliefs currently in place.
“This means businesses will have a more realistic idea of the bills they are facing.
“From what has been said in the run-up to the budget, I am not getting my hopes up too much, but we would still like to see VAT in the hospitality sector reduced to 12.5%.
“This is something that the All-Party Parliamentary Group (APPG) for Hospitality and Tourism backed earlier this year.
“We have one of the highest rates of VAT in Europe. A reduction would make us more competitive with the continent and will make our services more affordable to the public.
“We’ve not had a particularly good summer and while I appreciate the Government has said this budget will be painful for many, I really hope that it contains something for us to smile about.
“We are also anxiously awaiting new of what the Government might do with Zero hours contracts, which are heavily used in the leisure, hospitality and tourism, and retail sectors, among others.
“Labour had said in a Green Paper in 2021 that it intended to ban zero hours contracts, while more recently it has spoken about banning ‘exploitative’ zero-hours contracts, without much clarification or definition around what is deemed ‘exploitative’.
“It’s possible that the government could make zero hours contracts unviable if they place too many new restrictions on them.
“We are also expecting the budget to announce new national minimum wage rates, a move which is likely to put even more pressure on our businesses, and which strengthens our case for some kind of support, such as the VAT reduction.
“We were cautiously optimistic about the last autumn statement and the Spring Budget, but we’re a little more anxious this time round, while hoping that the new Government will not leave us out in the cold like the previous administration did, and takes steps to properly acknowledge the significant contribution the hospitality sector makes to the UK economy and to give us the support we need and have been crying out for, for some time.”
