Chancellor Rachel Reeves restricts support for hospitality sector
Chancellor Rachel Reeves has faced significant backlash from the broader hospitality sector by announcing that financial assistance for elevated business rates will be confined to pubs, reports BritPanorama.
This announcement comes just days after Reeves indicated that restaurants and hotels could also be in line for help. The Chancellor maintains that pubs operate in a distinct category, a statement that has drawn criticism from various hospitality groups.
Over 130 hotel leaders, including representatives from Hilton, Butlin’s, and Travelodge, are now calling for a more comprehensive support package that extends beyond just pubs. Restaurants and music venues have similarly urged the government to reconsider reductions in property tax following alterations made during the recent Budget.
Speaking at the World Economic Forum in Davos, Reeves remarked, “The situation the pubs face is different from other parts of the hospitality sector, but we will be setting out the detail in the next few days.” This comes on the heels of her earlier commitment to delivering assistance in a “balanced way that particularly supports our pubs and the hospitality sector.”
Analysis from within the hospitality sector shows that the average property in England will experience an increase in business rates by £32,714 over the next three years. For pubs specifically, this amounts to a hike of £12,900 during the same period.
Allen Simpson, Chief Executive of UKHospitality, emphasized that the challenges faced by all hospitality businesses—such as rising business rates and escalating employment costs—are not exclusive to pubs. He underscored that hotels, restaurants, and cafes confront similar burdens and that a holistic solution is essential.
Simpson stated, “The Government has one chance to get this right. Without a package of support for the entire sector, I fear it will be too little, too late.”
Simon Vincent, Hilton’s President for Europe, the Middle East, and Africa, added that the high business rates imposed on hospitality establishments jeopardize jobs and economic growth. He called for immediate government action to ensure hotels are included in any sector-wide support initiatives.
Andrew Griffith, Shadow Business Secretary, criticized the potential exclusion of the broader hospitality industry, labeling it “criminal.” He argued that many hotels and restaurants face even steeper rate increases, thus jeopardizing their viability.
The ongoing debate around support for the hospitality sector reflects a challenging economic landscape, with the industry grappling with various pressures. As negotiations unfold, the need for a comprehensive approach to support remains central to alleviating the collective burdens faced by these businesses.
The current situation illustrates the delicate balance required in policymaking as the government navigates the complexities of sector-specific needs amid broader economic challenges.
