Kate Nicholls: Government must get hospitality back on its feet in the Budget

UKHospitality has been using its voice to campaign for change in the Spring Budget on 6 March. Kate Nicholls lays out what the industry needs

Hospitality is a bellwether sector. Put our industry back on its feet and you set the wider UK economy on the way to a full recovery. So with the Budget looming, we’re ramping up our campaigning on all fronts.

We’re talking to those in power and raising our voice in the media, petitioning the chancellor to use 6 March to introduce measures that will help hundreds of hospitality businesses survive, protect thousands of jobs and enable the rapid growth our industry can deliver.

One of our key asks is on business rates. This has become even more pressing, with the Chancellor having announced in his Autumn Statement a damaging 6.7% business rates rise that increases bills for two-thirds of the sector’s trade.

For those who manage to survive these increased costs, they’ll likely be forced to wave goodbye to money earmarked for investment, as it goes towards paying those higher rates. Galling doesn’t come close.

It’s why UKHospitality continues to put the case to government for a cap on business rates increases this year. Using April’s forecasted lower 3% rate of inflation would mitigate the impact of the rise, but, in an ideal world, the government would implement a freeze on rates, like it did for the small property multiplier.

We’re also calling for a reduction in the VAT rate for hospitality, leisure and tourism businesses. This proved a welcome relief during the pandemic, without which thousands – maybe more – hospitality businesses could have gone to the wall. Reducing VAT again, to 12.5% or lower, would be an effective way to boost tourism and support employment.

Two big asks, but there is also a third to address wages. Given we know the colossal impact April’s National Minimum and Living Wage rises will have on businesses in a sector like ours, there needs to be action to address this. Simply put, businesses and government should share the burden through a cut to the lower rate of employers’ National Insurance contributions to 10%. And all our work on this is having an effect. At a recent debate in Parliament, MPs from across the political spectrum acknowledged the importance of hospitality, backing much of what we’re asking the spring budget to deliver, in particular the need to cut VAT.

As ever, the more voices that are heard asking for these measures, the more powerful our message to government is. We know that local MPs react to the issues that are flagged by constituents and to help us drive home the message ahead of 6 March, we’re urging everyone to write to their local MP about the urgent need for action if hospitality is to lead the UK’s economic recovery.

While you’re doing that, we’ll carry on our role as the only voice leading the way on behalf of all hospitality businesses. We’re urging and persuading government that the right measures in the Budget could give our sector the support it so desperately needs to navigate soaring costs, invest in communities and create local jobs. And that will help drive the economic growth that this country requires for everyone’s benefit.

Kate Nicholls is chief executive of UKHospitality