Bosses from Burger King, Butlins, Accor Hotels, Stonegate Pubs and Merlin Entertainments are among the 112 signatories of an open letter urging the Chancellor to take immediate action at the Budget to prevent further business failure.
In the letter, leading trade body UKHospitality and business leaders highlight how rising costs, labour shortages and the cost-of-living crisis has led to an unprecedented surge in closures, among high-profile names as well as local community venues.
The letter coincides with new data that shows that 74% of consumers think hospitality needs and deserves more support from the government. The data from Zonal and CGA by NIQ also finds that 64% of UK consumers believe hospitality plays a vital role in their communities, indicating clear public support for aiding the industry at the upcoming Budget.
Signatories, which include restaurant operators, global hotel brands, pub groups and leisure parks, back UKHospitality’s calls for the Chancellor to:
- Put a cap on business rates increases from April 2024 at 3%: The Autumn Statement 2023 announced a significant 6.7% increase in the multiplier for ‘large properties’. This is likely to be more than double the rate of inflation when it comes into effect, putting further upwards pressure on the headline rate. We also urge the devolved Governments to pass on the relief in full.
- Introduce a temporary cut in the lower rate of Employer National Insurance Contributions to 10%: The sector supports measures to create a higher-wage economy but the record increase in the National Living Wage will create major cost pressures for a labour-intensive sector like hospitality. A share of the burden between Government and industry would reduce the pressures on price increases.
- Review the benefits of a reduced rate of VAT for the sector to 12.5%: The UK’s current rate of VAT is uncompetitive internationally and leads to higher prices. Reducing VAT for hospitality and tourism is a globally recognised tool to boost tourism, support employment and generate growth – while constraining prices.
UKHospitality Chief Executive Kate Nicholls said: “The sector’s message to the Chancellor is loud and clear: without further economic support at the upcoming Budget, we risk losing more of our institutions and doing irreversible damage to our world-leading hospitality sector.
“Extortionate operating costs are making it incredibly challenging to run a profitable business, so it’s vitally important that this is addressed in order to ease ongoing cost pressures and protect businesses from the threat of closure.
“This sector is one of the UK’s leading employers, providing work to more than 3 million people, and contributing more than £93 billion to the economy each year. It not only deserves the support we are collectively asking for, but it needs it.
“I sincerely hope that this letter, supported by leading individuals from across hospitality, will be enough to convince the Chancellor that his actions on 6th March will be make or break for many venues up and down the country.”
