The First 100 Days – What Hospitality Needs From The New Government’s Plan

This Article Featured in the World of Hospitality's October 2024 Edition

Following Sir Keir Starmer’s election victory in July, leaders from all sectors have urged the incoming Labour Government to fulfil its pledge of prioritising economic growth. Gareth Evans – former chef and founder of Evans & Co Hospitality Accountants – tells us what the industry needs from our new Government’s plan.

An Immediate Reduction in VAT

To rejuvenate the hospitality industry swiftly, a reduction in VAT rates is essential. Without this adjustment, there is no quick fix to mitigate food inflation or address the ongoing challenges such as tax burdens, supply chain issues, staff recruitment from Europe, PAYE, and pandemic-related debts.

Passing these increased operating costs onto customers is not feasible, particularly as they are already enduring financial strain from the cost of living crisis over the past three years.

Business Rates Relief Extended

Increased food and utilities costs and a pending NMW rise are squeezing margins more tightly that ever, and there’s no doubt that an extension of the existing Retail, Hospitality and Leisure Business Rates Relief scheme which provides eligible businesses with 75% relief in Business Rates would certainly be welcomed.

Realistic Energy Price Caps

Whilst households benefit from energy price caps, there has never been a scheme in place for businesses, and several of our clients have seen their utilities costs quadruple over the past few years. Instead, the government introduced the Energy Bills Discount Scheme which offered discounted energy rates on eligible non-domestic energy contracts, but since this scheme ended in March 2024, no further government support has been announced

Alcohol Duty Reform

20% VAT is levied on food sold in pubs, but not in supermarkets, which in turn allows these retailers to subsidise artificially low beer prices. As figures show that consumers are spending less money in pubs and bars than at any time since the lockdown ended, this feels to many like yet another penalty at the expense of the struggling hospitality sector.

A Dedicated Minister for Hospitality

All of these issues and more need a strong voice at the highest level and whilst there’s been a lot of talk about a dedicated minister for the Night Time Economy, we believe the Hospitality sector as a whole needs a dedicated voice in Parliament. Implementing such a move would establish a national network of industry representatives to assist policymakers in navigating the sector's unique challenges, showcasing a commitment to representation for the sector.