Editor’s Viewpoint: The Budget – When the Medicine is Worse Than The Cure

By Peter Adams, Editor, CLH News.

Industry leaders have called Chancellor Rachel Reeves’ autumn budget a “hammer blow” to hospitality, and they are absolutely right.

Our front page coverage and the chorus of condemnation from sector leaders tells you everything you need to know about the scale of this disaster.

Higher taxes, soaring operating costs, and squeezed consumer spending power represent a perfect storm that threatens the very survival of businesses across our sector.

But if the budget itself wasn’t damaging enough, the green light given to mayors nationwide to impose tourist taxes on hard-working Britons represents a new low in fiscal policy.

Can any government really sink any lower? I ask this question sincerely and with genuine dismay.

Most people in this country work 48 weeks of the year. They save for modest holidays in the UK, short breaks to celebrate anniversaries and birthdays, weekends away to recharge and reconnect with loved ones.

To load an additional tax onto these precious moments smacks of sheer desperation and a complete failure to understand what hospitality means to ordinary families.

Advocates will point to similar tourist taxes across EU countries, but there is one stark and crucial difference that renders the comparison meaningless. Those countries had the foresight years ago to appreciate the genuine value of hospitality and tourism to their economies.

They cut their VAT rates accordingly, which effectively negates the impact of a tourist tax on consumers.

Here in the UK, once tourist taxes are implemented, we will be looking at an effective 27% VAT rate for consumers on their holidays. This would make us one of the highest-taxed tourism destinations in Europe.

Let that sink in for a moment. Consumers visiting destinations in England would be charged double the tax of visiting Paris and 70% more than Barcelona or Rome.

How can we possibly compete? How can our businesses survive when we’re pricing ourselves out of our own domestic market?

Perhaps the most concerning aspect of this budget is the complete absence of any vision for recovery.

There’s no sense of “take this unpleasant medicine now and things will improve.” Where is the roadmap? Where is the plan? I simply cannot see it, and I suspect neither can the thousands of operators now contemplating their futures.

The exodus has already begun. Investors and wealthy individuals are leaving the UK in droves, driven away by punitive taxation, the end of non-dom status, and the search for more favourable business environments abroad.

The UAE, Italy, and Jersey are rolling out the welcome mat with lower taxes and entrepreneur-friendly policies. The projected net loss of 16,500 millionaires in 2025 should set off alarm bells across Whitehall, but the silence is deafening.

We wholeheartedly support UKHospitality’s “Taxed Out” campaign, but let’s be clear about something. This isn’t just about hospitality anymore. This country has become hostile to entrepreneurs across every sector. When any nation loses its brightest minds, its wealth creators, its job generators, it is in serious trouble.

History teaches us that you cannot tax your way to prosperity. You cannot build a thriving economy by driving away the very people who create employment and opportunity. Yet that appears to be precisely the strategy this government has chosen.

The can has been kicked down the road for too long. The alarm bells are ringing loudly, and they will not be silenced by political spin or empty promises.

In 2026, our sector must receive the support it desperately needs. Not platitudes, not consultations, but concrete action: meaningful VAT cuts and an end to this relentless assault on an industry that employs millions and sits at the heart of British community life.

The hospitality and licensed on-trade sector has survived wars, recessions, and a global pandemic. We are resilient, innovative, and essential to the fabric of this nation. But even our patience and resourcefulness have limits.

Chancellor Reeves and this government need to understand something fundamental: you cannot build a strong economy by destroying the businesses that make Britain worth visiting, worth investing in it hasn’t ever and will never work!

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I can always be contacted at edit@catererlicensee.com