Chancellor Rachel Reeves unveiled the Spending Review, which sets the day-to-day budgets of Government departments over the next three years, to MPs in the House of Commons today (Wednesday 11 June).
She announced funding for the NHS, defence, infrastructure and energy security.
British Institute of Innkeeping CEO Steve Alton welcomed the Chancellor’s plans for increased spending on health and education but highlighted how funding this by over-taxing small pub businesses through national insurance contribution and national minimum wage hikes alongside cutting business rates relief was not sustainable.
He added: “We have already seen unemployment figures rising as employers feel the pinch and cut back on recruitment, but with investment in our sector, the Chancellor could see this rapidly reversed providing more essential flexible employment opportunities, unlock investment and deliver vital economic growth.”
UKHospitality chief executive Kate Nicholls said thriving high streets and hospitality were essential to the Government’s mission of renewing Britain and the Spending Review included announcements that can contribute to that ambition.
She added: “Significant investment into skills, development and apprenticeships should be accessible to hospitality businesses and we’re encouraged by the potential for improvements to regional transport to benefit venues, consumers and workers alike.
“However, it remains the case that the overwhelming challenge holding back hospitality from meeting its potential is the current tax burden imposed upon it.”
“As we look towards the Budget and the rest of the parliament, it must be a priority to bring down the cost of doing business. The business rates reform being finalised this autumn will be a critical element of that, and there needs to be the maximum level of discount applied to hospitality businesses.
“With the Industrial Strategy set to be published imminently, hospitality’s ability to deliver socially productive growth must be recognised and harnessed to deliver economic growth, jobs and regeneration in towns and cities right across the UK.”
The British Beer & Pub Association reiterated the number of pub closures last year and urged the Government to aid the sector at the Autumn Budget including to “implement meaningful business rates reform and a reduction in beer duty”.
High operating costs
The Night-Time Industries Association (NTIA) said the UK’s night-time economy stood at a critical juncture following the Spending Review.
The organisation warned about the impact the chance of any further cost rises.
Chief executive Michael Kill said: “We appreciate the Government is trying to balance many competing demands.
“But for our sector - already absorbing tax hikes from April - the prospect of further increases is alarming. Additional financial pressure could tip many businesses over the edge, particularly given high operating costs and limited access to investment.”
While the trade body welcomed the Government’s long-term focus on energy infrastructure, it also called for action on the many challenges facing the sector.
“Energy security for the future is important,” Kill added, “but venues are struggling to keep the lights on today.”
Kill echoed the requirement for industry support when looking ahead to the Autumn Budget later in the year.
“We need a Budget that understands our value, not one that inadvertently accelerates decline,” Kill said. “The Government must work in partnership with us.
“The capital investment plans may look bold, but the devil is in the detail. We need immediate support, clear fiscal strategy and genuine engagement ahead of the Autumn Budget if we are to safeguard a safe, thriving, and sustainable night-time economy.”
No support
The Scottish Hospitality Group said the sector was “again, let down by Rachel Reeves”.
Director Stephen Montgomery added: “This statement does absolutely nothing to support the hospitality sector in Scotland or across the UK.
“Today we heard all about the spending plans however, nothing about helping those who will pay for it through taxes.
“On a day where we know unemployment has risen, employers are holding off on recruitment, inflation has all but doubled and the OBR having already halved the growth figure for 2025, the Chancellor offered nothing for the third largest employer in the country, which contributes billions each year in taxes to support the public sector.
“To help the economy to grow, you need businesses to grow so today, we yet again see the sector being let down by Rachel Reeves.
“The crippling increase in employers’ national insurance contributions handed down in April is now one of the biggest strains on hospitality along with the high VAT rate.
“I guess asking the Government to U-turn twice in a week would have been too much to ask.”
