NEWS FROM Expert Insights
In recent years, our focus in the build up to a Budget Statement has been - ad nauseum some might argue - on reformation of the business tax system, most notably business rates. Even with five or six months to go until this year’s Budget, it is clear that we are going to be doing much the same this time around, but with a stronger emphasis on the inequality that is building between our sector and the digital economy.
Business rates continue to be a thorn in the side of hospitality businesses and we still haven’t seen the widespread reform of the system promised in the successive manifestos of governing parties. Venues are still struggling to cope with rising property costs putting jobs around the UK at risk. The wider hospitality sector pays 10% of all UK business rates while generating 3% of turnover, an overpayment of £1.8 billion. Our campaigning has managed to secure relief for pubs, but they still overpay by £500 million and that is due to increase by 17% by 2021-22.
Much of the problem lies in the fact that the system is out-of-date and unsuitable for the realities of modern businesses. Like the nation’s railways, the business tax system is antiquated and in need of a pretty thorough overhaul. It was designed before the realities of the potential digital commerce boom could reasonably have been foreseen. Consequently, the current system is skewed in favour of digital businesses forcing businesses in the heart of communities, like bars and restaurants, to shoulder a disproportionate burden.
Thankfully, the considerable efforts of UKHospitality to make this case does appear to be getting through and policy-makers are slowly but surely getting the message. Last month, following an evidence session with the Valuation Office Agency, the Treasury Committee wrote to the Chancellor expressing its concerns about the
DIVERSITY KEY TO FUTURE OF HOSPITALITY SECTOR
Kate Nicholls UKHospitality
Chief Executive
business rates burden on high street businesses. UKHospitality briefed MPs, last month, ahead of a Westminster Hall debate about the damage that business rates inequalities and other pressures on hospitality businesses have already wrought. It has taken a lot of very hard, very persistent work, but the message is getting through to Parliamentarians that something must be done, otherwise venues will fail and jobs will be lost.
If we are to secure the success we want and that businesses need, then our exhaustive campaigning will need to be a constant feature, even with the Budget a relatively long way away.
Last year, relief for pubs was secured partly because venues around the UK made their MPs aware of the situation, who, in turn, put pressure on the Chancellor. We will need this sort of widespread, concerted effort from hospitality businesses once again, so don’t be afraid of contacting your MP to urge them to act to support valuable economic and social assets in their areas. UKHospitality will again be posting template letters for that purpose on its website closer to the time.
In October, UKHospitality will be holding a day of grassroots campaigning in Parliament, encouraging businesses to go directly to their MPs. Only by banging the drum repeatedly and loudly will we be heard among the noise of competing issues and lobbying.
UKHOSPITALITY WARY OF MENU CALORIE LABELLING IMPACTS ON UNDER PRESSURE SECTOR
Responding to the launch of Chapter Two of Government’s childhood obesity plan, UKHospitality’s CEO, Kate Nichols, said:
“The out-of-home sector supports workable efforts to promote healthier eating habits, as demonstrated by the proactive actions already in reformulating menus to reduce calories and increase transparency and choice for customers. However, the introduction of mandatory menu calorie labelling would represent a significant burden for businesses, particularly smaller operators.
“Many venues already choose to show calorie content on their menus, with many high street
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brands giving customers an unprecedented level of information but the reality is that smaller businesses will struggle to do so. It would impose a serious additional cost for many businesses facing tightening margins, increased operating costs and wider economic instability.
“Furthermore, it would hamper venues endeavours to incorporate seasonal ingredients and ‘specials’ to attract custom, as well as restricting smaller restaurants’ ability to innovate, particularly when tackling food waste. Furthermore, calorie labelling would largely fall outside of the Government’s targeting of obesity among lower income children, as obesity in that demographic is less likely to be caused by dining in restaurants.”
Offering more part time senior positions and showcasing real life examples of progression were among many suggestions of ways to help diversify and promote the UK’s growing hospitality industry, at the second session of the UK Hospitality Commission 2030 which took place on Tuesday (12 June 2018) in the Houses of Parliament.
In Parliamentarians heard from Courtney Avery, a Youth Employment UK Ambassador, Nikki Kelly, Acting CEO and Director of Programmes at Tottenham Hotspur Foundation, Sunder Katwala, Director of British Future and Conor D’Arcy, Senior Research and Policy Analyst at the Resolution Foundation.
A number of ideas to help promote the industry were discussed such as offering more part time senior positions, reviving the Saturday job, developing work schemes that complement older workers and showcasing real life examples of progression. Speakers also called for the Government to put hospitality front and centre of the Industrial Strategy.
UKHospitality Chief Executive Kate Nicholls said: “The hospitality sector is diverse in workforce and reach across the UK. The industry employs more women than men and is the second largest employer of EU workers and the fifth highest as a percentage of the workforce. Now is the time for Government to step up and support our industry in developing the hospitality workforce of the future.”
The Commission, led by UKHospitality, aims to promote understanding of the importance and potential of the UK’s hospitality sector and brings together a wide range of hospitality employers and All-Party Parliamentary Groups, along with other stakeholders, industry bodies and authorities, to deliver an employment foundation for the sector.
The third session will be held in early July, focusing on education and skills in the industry, and will be co-chaired by Gordon Marsden MP, Shadow Education Minister and Chair of the APPG for Tourism, Leisure and Hospitality Industry and Nic Dakin MP, Chair of the APPG for Education.
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