The government’s failure to cut VAT and business rates in today’s mini-budget will mean hundreds of restaurants and pubs will close this winter, according to hospitality industry leaders. They say Chancellor Kwasi Kwarteng’s (pictured, second left) strategy to boost growth will come too late to save small-scale businesses, even if it proves successful.
Kate Nicholls, chief executive of UKHospitality, said: “Today’s measures will take time to take effect. The chancellor committed to making the UK a globally competitive tax regime, yet overlooked two obvious levers to achieve that, through lower VAT and business rates reliefs. Our VAT rate is the highest in Europe, which is starkly at odds with ambitions for global tax competitiveness and will hopefully be addressed in the autumn Budget, if not before.”
Peter Borg-Neal, founder and chairman of Oakman Inns, tweeted: “Deeply disappointing. Clearly, we have failed to get what was needed for SMEs in our sector. Beer duty will benefit brewers and supermarkets only. Nothing on business rates or VAT. Savings on NI eaten up by interest rate rises. A cut in corporation tax is useless to SMEs that built up losses during covid. Our industry is beset with unfair pre-profit taxes. How do we prosper in this scenario?”
Sacha Lord, the night time economy adviser for Manchester, was more damning: “These announcements will now mean last orders for thousands of hospitality businesses, meaning mass redundancies. I’m absolutely clear, this gov’t is just about big business, corporations and the fat cats. They have just sent a strong message to the hospitality industry: They don’t care. They have just thrown small family-run businesses to the wolves.“