Sector Fights for Deals on Brexit and Beyond

UKHospitality-LogoThe eating and drinking out sector needs to fight its corner hard in government to secure the best outcomes on Brexit and many more issues, UKHospitality CEO Kate Nicholls told CGA’s Future of Finance conference.

She was talking as the Conservative Party entered the later stages of electing a new leader and Prime Minister—a process that is adding more uncertainty to Brexit outcomes for businesses.

“Whoever becomes Prime Minister wants to renegotiate the deal [to leave the European Union]—but that’s unlikely,” she warned. The ongoing confusion is hitting the confidence of consumers as well as businesses, she warned. “There’s going to be a long period of uncertainty, and that will affect consumers.”

But she also pointed out that UKHospitality’s lobbying had helped to head off some of the worst potential consequences of Brexit, especially on freedom of movement. With the ‘settled status’ rights of EU citizens to remain in the UK now safeguarded, fears about a huge hole in hospitality have rescinded.

UKHospitality has also been working hard to ensure contingency plans for food supply in the event of a no-deal Brexit—though nightmarish scenarios of food imports backing up at Dover are still possible. Inflation, already high in many food and drink categories, could leap forward too, Nicholls added, suggesting that all businesses needed to put robust plans in place for a no-deal outcome.

She said lobbying needed to go well beyond Brexit. Domestic priorities for the industry include a root-and-branch review of the rates system—something long hinted at but never properly tackled. An increase in National Insurance Contributions would have a material impact on businesses’ ability to invest and create jobs, as well as taking the lowest paid workers out of tax. And the sector also needs to be vigilant on restrictive legislation around food and drink and make the case for responsible self-regulation and partnerships, Nicholls said.

Perhaps the most important job of all is to remind the government that hospitality is the beating heart of the UK economy. Nicholls pointed out that it is the country’s third biggest employment sector, creating one in eight new jobs and contributing £39bn a year in tax. That makes it far bigger than sectors like financial services and transport manufacturing—both of which often seem to get more attention from government than hospitality.

Nicholls said UKHospitality would be driving home these messages on behalf of the sector. “We’ll be front and centre fighting to get the best deals.”