Leading London restaurant chains have written to Prime Minister Theresa May, warning that a combination of soaring business rates, taxes, and the weak pound is crippling the industry. The letter, signed by 23 chief executives including those of Leon, Wagamama, Pizza Express, Wahaca, Yo! Sushi, and Carluccio's, calls for urgent government support to offset what they describe as a 'shocking' rise in overheads.
The biggest concern is the upcoming increase in business rates, which will hit London companies particularly hard. Some signatories face rate rises of more than 50 per cent, with new valuations being phased in from next April. Analysts warn that the rates, combined with upwards-only rent reviews, could force many shops and restaurants out of business.
John Vincent, co-founder of Leon, said: 'London’s restaurant chains are being squeezed as never before. The Leon in The Strand alone will see its rates go up by £24,000 next year. The Government needs to listen or restaurants will close and thousands of people will lose their livelihoods.'
Restaurateurs are also grappling with higher ingredient costs due to the pound's collapse after the Brexit vote, with some products up 20 per cent more expensive. They face additional costs from the 20 per cent VAT rate, a new apprenticeship tax, and increases to the National Living Wage, which will rise to £7.50 next year and towards £9 by 2020. While the companies support these pay initiatives, they argue the extra costs must be offset elsewhere.
The letter also urges the Prime Minister to guarantee that EU workers can remain after Brexit, citing widespread anxiety about losing hard-working staff. The bosses call for a reduction in VAT, an extension to the phasing-in period for business rate rises, and a cut to employers' National Insurance contributions. Ufi Ibrahim of the British Hospitality Association said: 'Restaurants are being hit by a perfect storm of extra costs. We fear that business rate rises will have a very damaging effect on our ability to keep contributing to jobs and the economy.'
