An outpouring of fury and despair from the hospitality industry over the vicious rise in business rates in the Budget seems – all too late – to have sharpened minds in Downing Street.
Yesterday, ministers let it be known that certain changes to how the rates are calculated may be on the way. In theory, this could be a small lifeline for struggling pubs across the country. But details came there none – so forgive me if I don’t put up the bunting yet.
The truth is that the Government has waged a cruel and unending war of attrition against the British boozer since coming to power 18 months ago.
Just ask celebrity restaurateur Tom Kerridge, who took to the airwaves this week to lament the devastating impact that Rachel Reeves‘ business rates regime is set to have on his four gastropubs from April. The bill for just one establishment, Kerridge revealed, was set to rise from £50,000 a year to £124,000.
That’s an absurd 148 per cent surge in costs, while the Michelin-starred chef’s other establishments face an average increase of more than 100 per cent.
Little wonder that Kerridge admitted he was asking himself whether there was any point in remaining open.
The Government’s imminent U-turn may dissuade him, but all I can say is, what on earth did he expect?
Kerridge effectively signed the death warrant for his own business when, in May 2024, he decided to endorse Labour ahead of that year’s general election.
The Government has waged a cruel and unending war of attrition against the British boozer since coming to power 18 months ago, writes Patrick Dardis
Patrick Dardis is the former chief executive of Young’s pubs
Along with several other high-profile virtue-signallers claiming to be from the world of business (though not a single FTSE 100 chief executive was among them), Kerridge signed an open letter backing Keir Starmer’s merry band of anti-capitalists as the ‘party of change’.
Talk about deluded turkeys voting for Christmas. As I wrote in these very pages, Kerridge and his co-signatories would find themselves fleeced by the very people they had championed.
I knew that whatever their promises to the contrary, a Labour government would prove disastrous for a hospitality sector already decimated by the Covid pandemic and rampant inflation, and one that has seen average utility bills rise by 57 per cent in the past five years.
So it inevitably proved.
I speak as someone with extensive experience in the world of hospitality, as the former chief executive of Young’s.
But even I did not anticipate just how devastating the decisions taken by this government would be for small and medium-sized firms in the sector – and indeed in countless other industries. Besieged by one economic hammer blow after another, many are being pounded into their graves.
On Wednesday came another calamity when the Government unveiled plans to cut the drink-drive limit as part of its new Road Safety Strategy. This will bring England in line with Scotland, which slashed its limits back in 2014, and will mean that a single pint could put you over the limit.
Of course, no one condones drink-driving, and everyone wants to see accidents and road fatalities reduced.
I knew that whatever their promises to the contrary, a Labour government would prove disastrous for a hospitality sector already decimated by the Covid pandemic and rampant inflation
But the Scottish data show that this measure – which would hit rural pubs already on their knees and see many more go out of business – is highly unlikely to work. A few years after its introduction in Scotland, Strathclyde Business School concluded it had ‘had no impact on either traffic accident or fatality rates’. As Neil Greig, of safety charity IAM RoadSmart, said: ‘The law-abiding majority have adapted to the new laws and the law-ignoring minority have carried on as before.’
And here’s the crucial point: the Scottish experience hammered pubs. Within a year, Scottish publicans were talking of alcohol sales down by as much as 60 per cent – and on average by 30 per cent. Labour’s plans – drawn up by a party whose seats are in largely urban constituencies – could be a death knell for England’s remaining rural pubs.
If even a celebrity chef such as Kerridge – who thought nothing of charging £37 for a plate of fish and chips at his concession in Harrods last year – is wondering whether it’s worth bothering to open the doors, who can blame the average publican, hotelier or café owner for throwing in the towel?
Even in good times, margins are horribly tight in the hospitality sector, as businesses are forever navigating the shifting sands of food prices, energy bills, even the weather – profit is never guaranteed.
In bad times, all these pressures intensify, and even the bigger chains can struggle. I know because I’ve been there. I steered Young’s through crises, from recessions to the pandemic.
Yet that doesn’t compare to this government’s toxic array of punitive taxes – none of which was flagged in the manifesto, and some of which Labour deliberately concealed from the public.
No change to National Insurance, they said – a lie. No tax rises – another lie, given that frozen thresholds have dragged millions of workers into higher bands. I even recall Reeves shamelessly pledging a ‘golden era for hospitality’ ahead of November’s Budget. Does Labour have any notion that the sector it is killing off accounts for 7 per cent of GDP, with pubs alone contributing £18billion in taxes? Does it realise hospitality is the third-largest employer in the British economy?
Whether it U-turns on business rates or not, pub closures will continue. Their plight will be forgotten as the Government drags the country into a brutal recession marked by high inflation, soaring unemployment and plummeting productivity.
For those of us who have dedicated our careers to building businesses that provide jobs, entertain our customers and sustain communities, this is not just frustrating – it is catastrophic.
But that may not be the worst of it. If, as is widely expected, Starmer does not last the year as PM, we could swiftly see the spectral return of his former deputy – and hardline socialist – Angela Rayner, the architect of the loathed Employment Rights Bill and not one but two national living wage rises in successive Budgets, which are putting off thousands of businesses from hiring new workers.
So buckle up, Mr Kerridge, for the next leg of Britain’s thrilling descent into socialism. You and your fellow self-styled business leaders should think on your rash support for Labour two summers ago – which is now driving your beloved businesses, like so many others, off a cliff.
Patrick Dardis is the former chief executive of Young’s pubs