Editor’s Viewpoint: Fiddling While the Sector Burns

August 29, 2025 Editor's Viewpoint

By Peter Adams, Editor, CLH News.

The numbers don’t lie, and they paint a devastating picture of an industry in free fall. This week’s revelation that hospitality accounts for over half (53%) of all UK job losses since Chancellor Rachel Reeves’ autumn budget is nothing short of catastrophic.

When we reported earlier this month that two venues are closing per day, many hoped these were isolated incidents. The brutal reality is far worse.
The sector now stands 14.2% smaller than at the start of COVID-19 – that other unmitigated disaster – with over 16,000 net closures in just five years.

At 98,746 sites as of June’s end, we’re witnessing the systematic dismantling of Britain’s hospitality landscape, and all roads lead directly to Westminster.

The government’s tax raid on employers has created a perfect storm of financial pressures that’s pushing restaurants and pubs into what can only be described as ‘survival mode’.

Higher National Insurance contributions, punitive business rates, and wage increases have combined to create an impossible operating environment. While we understand the government’s need for revenue, the execution has been woefully tone-deaf to the realities facing our sector.

Perhaps most concerning is how this financial pressure is manifesting in customer-facing practices that threaten to undermine the very foundation of hospitality: trust.

Recent industry data reveals that 16% of restaurant operators now add surcharges to customer bills, with service fees appearing in 3.7% of all transactions – more than double the rate from two years ago.

This fee proliferation has reached crisis proportions. Half of all customers report being less likely to return after encountering undisclosed charges, while social media transforms individual frustrations into viral campaigns that can destroy venue reputations within hours.

When operators are forced to squeeze customers through stealth charges just to survive, we’re witnessing the death of the transparent, welcoming hospitality experience that built this industry.

The public, already grappling with their own cost-of-living pressures, are understandably losing patience with what they perceive as sharp practice.
But these aren’t greedy operators exploiting customers – these are desperate businesses trying to stay afloat in an increasingly hostile economic environment created by short-sighted government policy.

The solution is staring the Treasury in the face: a bold VAT reduction for the hospitality sector. Such a move would achieve multiple objectives simultaneously – reducing operational costs for venues, eliminating the need for hidden charges, and providing a much-needed PR boost for what polling suggests is one of the most unpopular governments in memory.

A two-year VAT reduction would invigorate the sector, restore customer confidence, and demonstrate that the government finally understands the critical role hospitality plays in Britain’s economic and social fabric.

It would cost the Treasury far less than the current policy of managed decline, which destroys jobs, reduces tax receipts, and devastates communities across the nation.

We’re not immune to these pressures ourselves. The Chancellor’s disastrous budget is decimating not just hospitality but the publishing sector that serves it.

Every week we report on closures, job losses, and businesses struggling to survive, yet the government appears oblivious to the interconnected nature of these industries and their importance to Britain’s economic ecosystem.

Chancellor Reeves and her team need to understand that their policies aren’t just statistics on a Treasury spreadsheet – they represent real jobs, real communities, and real livelihoods being destroyed.

The title of this piece couldn’t be more apt: while our Chancellor fiddles with ideologically driven tax policies, the hospitality sector burns around her.

The hospitality industry has always been resilient, weathering everything from foot-and-mouth disease to financial crises to global pandemics. But it cannot survive a government that seems determined to tax it out of existence while ignoring the simple, proven solutions that could turn this crisis around.

The time for half-measures and consultation papers has passed. We need action, and we need it now. Before there’s nothing left to save.
What are your thoughts on the government’s approach to hospitality taxation?

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