A wave of anger and desperation from Britain's hospitality sector appears to have finally jolted the government into action, following a Budget that unleashed punishing increases in business rates. After fierce backlash, ministers have signalled potential changes to the calculation method, offering a glimmer of hope for pubs nationwide. However, with no concrete details provided, the industry remains deeply sceptical and under severe strain.
A Crippling Blow to Hospitality
The government's recent Budget has been accused of waging a "cruel and unending war of attrition" against British pubs since taking office 18 months ago. The stark reality of this policy was highlighted this week by celebrity restaurateur Tom Kerridge. He revealed the devastating impact Chancellor Rachel Reeves's new business rates regime will have on his four gastropubs from April.
In a shocking disclosure, Kerridge stated the annual bill for just one of his establishments is set to skyrocket from £50,000 to £124,000 – an astronomical increase of 148%. His other venues face average hikes of over 100%. The Michelin-starred chef admitted he is now questioning whether it remains viable to keep his doors open.
Broken Promises and a Scottish Warning
The sector's crisis is compounded by what many see as a litany of broken promises from the government. Pledges of no National Insurance changes and no tax rises have been undermined by fiscal drag from frozen thresholds, pulling millions into higher tax bands. This comes after the hospitality industry was already decimated by the pandemic and rampant inflation, with average utility bills soaring by 57% in five years.
Further pressure arrived with Wednesday's announcement of plans to lower the drink-drive limit in England, aligning it with Scotland. While road safety is paramount, data from Scotland suggests the policy may be ineffective. A study by Strathclyde Business School found the 2014 change "had no impact on either traffic accident or fatality rates." The devastating impact on Scottish pubs, however, was clear: within a year, publicans reported alcohol sales falling by up to 60%, with an average drop of 30%.
The Looming Threat to Communities and Economy
This combination of punitive measures threatens a sector that contributes 7% to UK GDP, with pubs alone generating £18 billion in taxes. Hospitality is also the nation's third-largest employer. The situation is particularly dire for rural pubs, which would be hammered by a lower drink-drive limit and could face closure en masse.
For industry veterans like Patrick Dardis, former CEO of Young's pubs, the government's approach is not just frustrating but catastrophic. He warns that even if ministers U-turn on business rates, the relentless pressure of taxes, rising costs, and new regulations will continue to force closures. The plight of these community hubs, he fears, will be forgotten as the economy potentially slides into a brutal recession.
The political dimension adds another layer of irony for commentators. Kerridge, who endorsed Labour ahead of the 2024 general election, is now facing the severe consequences of the party's policies. Critics argue that business leaders who backed the government are now being "fleeced" by the very administration they championed.
With margins always tight in hospitality, the current toxic array of challenges poses an existential threat. As high-profile figures like Kerridge contemplate their future, the average publican, hotelier, and café owner is being pushed to the brink, raising the grim prospect of a lasting scar on Britain's social and economic landscape.
