Speaking at 10 Downing Street on Tuesday 27 August, Prime Minister Kier Starmer asserted tough decisions would need to be made ahead of the Budget in October, which he said would be “painful”.
“Things are worse than we ever imagined”, Starmer explained, adding the party had inherited a “£22m black hole” in the economy from the previous Government.
Though the Prime Minister stood firm on his election pledge that there would be no increase to income tax, VAT or national insurance in the Budget.
“If we don’t tough action across the board, we won’t be able to fix the foundations of the country as we need”, he continued.
Level the playing field
However, business secretary Jonathan Reynolds MP told the Morning Advertiser (MA) the Government understood the importance of acting to tackle challenges faced by the hospitality sector, in particular making good on its promise to reform business rates.
“Thriving pubs are often at the heart of our communities and also play a role in supporting economic growth across the UK.
“That’s why it is important for us to act on the challenges that they face. We will reform business rates to levelling the playing field for our high streets.
“We’ll also do more to support our high streets, tackling anti-social behaviour, cracking down on late payments and empty properties to support entrepreneurship”, he said.
Meanwhile a spokesperson for HM Treasury told the MA the Government was “committed to a fairer business rates system, reiterating Labour’s manifesto pledge to “level the playing field” and “incentivise investment”.
It comes as earlier this month; industry trade bodies came together to make their demands for the sector ahead of October’s Budget clear as firms continue to struggle with the cost-of-doing-business.
Dwindling cash reserves
A survey conducted by the British Beer & Pub Association (BBPA), British Institute of Innkeeping (BII), Hospitality Ulster and UKHospitality (UKH) found 95% of hospitality businesses have experienced increased wage costs year-on-year.
It was a similar story for food (89%), insurance (84%) and energy (57%) costs, while inflation within hospitality was thought to have remained notably higher than the headline rate would suggest.
Furthermore, 80% of respondents said reforming business rates would have a positive impact on their business and help reduce costs.
In a joint statement, the trade bodies said: “It’s crystal clear there is an overwhelming desire from the sector that the Government rapidly delivers on its manifesto commitment to replace business rates and reduce the burden on high street businesses, as well as continue current support.
“With cost increases affecting almost every venue, this vital sector is being prevented from investing in businesses and communities, which would boost economic growth and new jobs. Instead, they’re having to use dwindling cash reserves just to pay the bills.”
