One of Labour’s top business supporters has issued a stark warning to chancellor Rachel Reeves that her Budget will cripple businesses and lead to swathes of job losses.
Industry advocate Sacha Lord has made an urgent plea to the Government, warning that without immediate intervention, up to 9,000 pubs could be lost within the next year.
Lord, a high-profile entrepreneur and former Manchester Night-Time Economy Adviser, has been a vocal supporter of the Labour Party for the past four years. However, in a dramatic turn, he has expressed serious doubts over the Government’s commitment to the industry, stating that Labour’s promise to be a ‘party for business and growth’ now rings hollow.
Urgent Call for Action
In a strongly worded letter to Chancellor Rachel Reeves, Lord outlined his concerns, urging the Government to acknowledge the severity of the crisis gripping the hospitality sector. Citing UKHospitality figures, he reminded policymakers that the industry employs 3.5 million people and contributes £54 billion in tax revenue annually.
“Hospitality isn’t just an industry; it’s the heart of our communities and our economy. These businesses are not just numbers; they are the backbone of our high streets, communities, and cultural heritage,” he stated. “If nothing changes, thousands more will collapse, and the Government will be directly responsible.”
His letter comes in the wake of recent tax hikes and operational cost increases, which have led to venue closures, job losses, and stalled investment in the sector. Lord challenged the Chancellor to consider whether supporting businesses to remain viable—even at a modest profit—would be more beneficial than allowing mass closures and job losses.
Mounting Pressure on the Government
The hospitality industry has faced a tumultuous few years, with the impacts of the pandemic still reverberating, energy costs soaring, and supply chain disruptions further straining businesses. The introduction of higher business rates and tax changes has exacerbated these issues, with many operators warning they can no longer remain viable under current conditions.
Industry leaders have repeatedly urged the Government to implement supportive measures, such as VAT reductions for hospitality businesses, business rate reforms, and targeted financial aid to prevent widespread closures.
The Chancellor’s office has acknowledged receipt of Lord’s letter but has yet to provide a formal response. With the threat of thousands of closures looming, industry stakeholders will be closely watching for any indication that the Government is prepared to step in before it’s too late.
Dear Chancellor,
I write to you as a long-standing advocate for the hospitality sector, deeply concerned about the precarious situation facing independent and small businesses in our industry. The sector employs 3.5m people and contributes £54bn in tax receipts to the UK economy, yet recent Government decisions threaten its very survival.
I urge you to act before irreversible damage is done.
I myself have been a Labour Party member for four years. I am now reconsidering this position. I attended your manifesto launch, I supported you in your bid to become the Government and I believed you had a deep understanding of the problems on the ground. Not anymore. I heard Labour declare itself the party for business and growth. I no longer believe that to be the case.
The policies outlined in the Autumn Budget and set to be introduced in April, will cripple businesses across the sector, and the consequences of these plans are already becoming visible.
We have evidence, Chancellor, of swathes of job losses, venue closures and stalled expansion and forecasters are predicting 9,000 pub closures within the next 12 months. Only last week, I heard of one pub chain that has halted five new site developments as a direct result of these decisions.
These landlords are already grappling with rising operational costs, reduced consumer spending, and severe staffing shortages, yet these new tax implications will push many small and independent operators to breaking point. These businesses are not just numbers, they prop up our high streets, our communities and our culture that we are famed for the world over.
If nothing changes, thousands more businesses will collapse, and Labour will be responsible.
Surely, a business supported to make even a modest profit, is far better than one that closes?
Beyond these horrific economic implications, the impact on employment, particularly in our younger generations, will be devastating. We are the third largest employer in the UK. 40% of our workforce is under 25. Closures will throw these young people to the wolves at a time when the cost of living is already unbearable for many.
And let’s not forget the social impact of our sector. For thousands of elderly and isolated individuals, their local pub, restaurant or café is a vital source of companionship and community.
The hospitality sector is an essential driver of growth, a major employer and an irreplaceable part of our social fabric. It can drive the economy out of the stagnancy it has found itself in. It deserves recognition and support to prevent thousands of closures.
Chancellor, you must do better.
If you have a plan, you must show us.
We must see it, or we cannot support it.
This is not just about businesses, it’s about jobs, livelihoods, and communities, and time is running out.
Will you support us or not?