Wagamama, Greene King sign open letter to Rachel Reeves

More than 340 hospitality businesses have signed a letter to Rachel Reeves just weeks ahead of the Budget to urge significant intervention to support the sector.

The signees are some of the biggest hitters in the industry. They include Marston’s, which operates more than 1,300 pubs, plus its rival Stonegate, the owner of Slug & Lettuce. Other signatories include Wagamama, Butlin’s, and notable hotel chains like Marriott.

The group argues that the hospitality sector needs some relief as rising business rates, increasing goods costs, and difficulties in recruiting are all impacting confidence.

What does the letter say?

The letter, which came from action group UKHospitality, has a core message: “…deliver change for hospitality at this Budget so that we can get back to growth”.

It continues: “Many businesses have either closed or cancelled planned expansion. Young people and those who work part time have seen their opportunities narrow and the benefit bill has grown as a result. Towns and rural and coastal areas have been hit harder than the big cities due to the prevalence of hospitality. Consumer prices have risen.

“We are asking for urgent action at the Budget, so we can support your goals to get young people and the economically inactive into work, regenerate high streets and boost tourism and, ultimately, drive economic growth.”

A turbulent few months

The signatories also claim that there have been more than 80,000 jobs lost since the last budget, which they say has caused hospitality to be “taxed out” – and some businesses taxed out of existence.

Kate Nicholls, Chair of UKHospitality, said the last Budget was “devastating”. “Business closures, job losses, curtailed investment, consumer price rises and lost opportunities for young people are all direct impacts of the choice made to inflict £3.4bn of additional annual cost”. She added that, “without action, we will see these impacts continue and intensify.”

The Government is currently reviewing licensing laws for pubs – and this will bring some relief – but the response has been that even more is needed, especially as costs of staffing and premise are rocketing.

What does the industry want?

The letter states: “We are asking for urgent action at the Budget, so we can support your goals to get young people and the economically inactive into work, regenerate high streets and boost tourism and, ultimately, drive economic growth”.

The signatories ask for lower business rates. This is for businesses across the scale – as they are asking for the maximum discount for hospitality properties under £500,000 (rateable value) but also no penalty charge to larger hospitality properties.

At the end of last month, experts warned that there could be a £1bn increase in business rates in April and this will cripple some businesses.

The second ask is for National Insurance Contributions from employers to be frozen, in order to boost jobs “through targeted support for employers hiring young people and those returning to work”. They are also encouraging the Chancellor to cut VAT on hospitality “to drive investment and make us more competitive with European counterparts”.

With the Budget creeping ever closer, this letter is hoped will have an impact – but businesses are also bracing for a negative impact.