One of the most senior figures in London’s embattled hospitality sector today spoke of his frustration at the “lack of a clear plan” for growth from the Chancellor just a fortnight ahead of an expected heavily tax raising Budget.
Simon Emeny, executive chairman of Chiswick based pub chain Fuller, Smith & Turner, said he was “frustrated” by Labour’s failure to deliver the growth it promised at last year’s election.
He urged Rachel Reeves, who is expected to unveil an extra £30 to £35 billion of revenue raising measures on November 26, “to avoid further punitive financial measures” on the sector.
Emeny, who was today revealing a 28% increase in underlying first half profits, added: “The country needs ambitious and innovative ways to drive sustainable economic success. It needs new ideas, new thinking - and I genuinely hope the Government succeeds in that and succeeds quickly.”
Last year’s Budget delivered big increases in employer National Insurance Contribution (NIC) rates, which, combined with an above inflation hike in the National Minimum Wage, has been blamed for a huge jobs shake-out in hospitality. Both came into effect in April.
Emeny said the two measures had added £8 million to Fuller’s annual costs.
Yesterday the Office for National Statistics (ONS) revealed that the national rate of unemployment jumped to a decade high - excepting the pandemic - of 5% in the July to September quarter. London is the worst hit region with the jobless rate rising to 6.5%.
The capital’s huge hospitality sector has been particularly badly hit by the perfect storm of higher employment costs hard on the heels of soaring food and energy bills as well a rising business rates.
Kate Nicholls, chair of UKHospitality, said yesterday: “Thirteen months of falling employment and 170,000 fewer people on payroll is a shocking indictment of the damage caused by last year’s Budget.
“Hospitality has borne the brunt of these changes, with more than half of all job losses coming from our sector. If the Government wants to get more people back into work and revitalise high streets, it needs hospitality firing on all cylinders, but right now we’re being taxed out.
“We urgently need action at the upcoming Budget and are calling on the Government to lower business rates, fix NICs and cut VAT. These measures will help reverse some of the damage, protect jobs and allow hospitality to grow and prosper again.”
Emeny today revealed that Fuller’s revenues rose 7% to £207.5 million in the six months to 27 September while adjusted profit before tax rose 28% to £22.5 million from £17.6 million. Christmas bookings are 16% ahead of the comparable period last year.
