Industry reacts: Autumn Statement ‘brings little comfort’

The hospitality industry has warned that the chancellor’s Autumn budget, unveiled yesterday (17 November), does not go far enough with plans for economic growth and brought “little comfort” to the industry.

Responding to the Autumn Statement, UKHospitality CEO Kate Nicholls said she was “pleased that the chancellor has listened to the vast majority of UKHospitality’s proposals on business rates”, and said it was “encouraging” energy support will continue post-April “for the most vulnerable sectors, of which hospitality has already been recognised”.

However, she warned the current system is still “outdated and not fit-for-purpose”, adding that the government made a manifesto commitment of root and branch review and “it’s essential that this is delivered as soon as possible”.

She added: “What we failed to hear today from the chancellor was any plan for economic growth, despite him recognising its importance. Businesses create jobs, deliver higher wages and contribute millions in tax revenues but without a serious plan from the government, margins continue to be squeezed without a path forward to growth.

“There is nothing to give firms confidence, let alone invest, and we need to see an urgent plan for economic growth and how business will be at the centre of that. UKHospitality stands ready to work with the government to develop such a plan and on the essential package of energy support post-April.”

Meanwhile, Lionel Benjamin, co-founder, AGO Hotels, said that SMEs looking to the budget to provide “some, even minimal, relief” from the current economic climate were “met with more bad news”.

He said: “The announcement two-thirds of properties will not pay a penny more in business rates next year with the promise hospitality will benefit to the tune of £14bn over five years will bring very little comfort to those who are imminently facing the possible closure of their businesses. The entire business rates system needs to evolve, and a permanent re-structure is essential.

“The already stated rise of corporation tax to 25% from April 2023 and the changes to tax-free dividend allowances are further blows to businesses. It remains to be seen what the Treasury-led review on energy will recommend. In the meantime, in just over five months, businesses no longer have the help they need for soaring energy bills.”

He added: “Earlier this week, we heard the hospitality industry will face a £3.6bn bill next April if business rates increase in line with inflation – a £900m increase this year – creating a huge barrier for growth in the industry. Our main asks were a reduction of VAT to 12.5% and a comprehensive review and reduction of the wildly outdated system of business rates. Today’s Statement was an opportunity for the Government to show it was truly promoting business growth, but it failed to do so. 

“We totally understand any help from the Government does come with a long term cost, a balanced approach is prudent though it is vital businesses are given the tools now, to help weather the coming months. At AGO Hotels, our main concern is, without additional support, we will have no choice but to pass increased costs onto consumers, further fuelling inflation or worse. We are aware of other hoteliers who are contemplating closure.”