Business leaders and MPs increase calls for industry support ahead of Budget

By James McAllister

- Last updated on GMT

Hospitality business leaders and MPs increase calls for industry support ahead of Budget

Related tags Vat Government Legislation Tax ukhospitality Business rates Business rate relief

Hospitality business leaders have signed an open letter urging the Chancellor to take immediate action at the Budget to support the sector.

Bosses from Burger King, Butlins, Accor Hotels, Stonegate Pubs and Merlin Entertainments are among the 112 signatories of the letter, written by UKHospitality, which highlights how rising costs, labour shortages and the cost-of-living crisis has led to an unprecedented surge in closures across the industry.

It coincides with a separate group of 45 Conservative MPs submitting their own letter to Chancellor Jeremy Hunt that calls on him to reform VAT and business rates for hospitality businesses in next week’s Budget.

UKHospitality’s letter calls on the Government to cap business rates increases from April 2024 at 3%, rather than allow the standard multiplier to rise by 6.7% in April as was announced at last year’s Autumn Statement​.

It also asks for the lower rate of Employer National Insurance Contributions to be temporarily cut to 10%; and reasserts the industry’s long-running demand​ to reduce its VAT rate to 12.5%.

“The sector’s message to the Chancellor is loud and clear: without further economic support at the upcoming Budget, we risk losing more of our institutions and doing irreversible damage to our world-leading hospitality sector,” says Kate Nicholls.

“Extortionate operating costs are making it incredibly challenging to run a profitable business, so it’s vitally important that this is addressed in order to ease ongoing cost pressures and protect businesses from the threat of closure. 

“This sector is one of the UK’s leading employers, providing work to more than three million people, and contributing more than £93bn to the economy each year. It not only deserves the support we are collectively asking for, but it needs it.

“I sincerely hope that this letter, supported by leading individuals from across hospitality, will be enough to convince the Chancellor that his actions at the Budget will be make or break for many venues up and down the country.”

In their own letter, a group of Conservative MPs led by Simon Jupp, MP for East Devon and chair of the All-Party Parliamentary Group for Hospitality and Tourism, urged the Treasury to address the ‘inequitable business rates regime’.

The letter said the hospitality industry had been hit by ‘sustained pressures’ in recent years, which included high energy bills, rising wage costs and a challenging recruitment environment.

MPs to sign the letter, including Priti Patel, Thérèse Coffey, Tobias Ellwood and Stephen Crabb, have also backed the Hospitality Sector Council’s call for a temporary cut in hospitality and tourism VAT.

It comes after a Westminster Hall debate held in late January saw MPs from across the political divide including Ellwood and former Liberal Democrat leader Tim Farron voice their support for measures – including a cut to VAT – to support the sector​.

Chancellor Jeremy Hunt will deliver his Spring Budget on 6 March.

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