Hospitality has felt a ‘Burnham Bounce’, but tax burdens and political instability are holding back investment. That’s the take-away from a member survey conducted by the British Beer and Pub Association, the British Institute of Innkeeping, UKHospitality, and Hospitality Ulster.
The Burnham Bounce was seen across the hospitality sector, with optimism that the change in leadership would benefit the sector more than doubling following the prime minister’s announcement to reduce business rates.
Prior to the announcement, just 18% of hospitality venues, pubs, and brewers said they were optimistic that the incoming change in government leadership would benefit the hospitality and brewing industry. Following the announcement, optimism in the sector more than doubled to 37%.
While hospitality’s tax burden remains the greatest barrier to investment (76%), political instability (37%) is the second biggest barrier for businesses. The trade associations said the prime minister should continue to build on his encouraging first steps to back hospitality, with clear evidence that it is already rebuilding confidence in the sector.
In terms of measures that would allow their businesses to grow, hospitality businesses overwhelmingly backed a VAT reduction (92%), which comes on the back of more than 330,000 people backing the #VATsTheProblem campaign, calling for 10% hospitality VAT. Businesses also supported reducing business rates bills (68%) and changes to employer National Insurance contributions (52%).
In a joint statement, the trade bodies said: “The new prime minister’s actions to back hospitality has clearly driven a boost in the sector’s optimism, yet significant challenges remain. The support for pubs and live music venues on business rates was a great first step, and now we need to see wider support and conditions to allow the entire hospitality sector to grow and create jobs.
“Our tax burden — [one of] the highest in the economy — along with new regulatory costs is overwhelming us, and the real victims are high streets, jobs, and communities. A lower rate of VAT, wider permanent business rates reform, and changes to employer NICs would help deliver the prime minister’s bold ambitions for every postcode.
“We want to continue to work with the government so we can create new jobs, investment and growth, which will create a brighter, more prosperous UK.”
