Hospitality chiefs warn Reeves of carnage over Budget tax hikes
Rachel Reeves will this weekend be told by some of Britain’s biggest hospitality groups that the tax hikes imposed in last month’s Budget risk triggering a tsunami of job losses across the sector.
Sky News has learnt that dozens of bosses from pub, restaurant and hotel operators have agreed to sign a letter to the chancellor calling her inaugural fiscal statement “regressive in [its] impact on lower earners” and warning that “business closures and job losses within a year” are inevitable.
The letter, an early draft of which has been seen by Sky News, has been circulated among executives from Stonegate Group, Britain’s biggest pubs operator; a division of the company which owns Wagamama; Burger King; the Hotel du Vin and Malmaison hotel chains; and Tossed, the high street salad bar operator.
One signatory cautioned this weekend that the contents of the final letter had yet to be finalised and could change.
Collectively, the signatories employ tens of thousands of people across Britain, although the final tally was unclear on Saturday as UK Hospitality, the trade body coordinating the letter, was still canvassing members about their willingness to put their names to it.
In the letter, they repeat a warning that steep increases in employers’ national insurance bills, coupled with the hike in the national living wage, will cost the hospitality industry close to £3.5bn annually.
They also say that the commercial viability of “important public sector catering contracts for schools, hospitals and prisons” will be thrown into question.
The chancellor and prime minister have stressed the budget’s focus on the NHS
Ms Reeves said in the Budget that the Treasury would yield an extra £25bn annually from the employer NICs (national insurance contributions) increase, prompting a barrage of criticism from retailers and hospitality companies which have large numbers of part-time employees.
“The changes to the NICs threshold are not just unsustainable for our businesses but inevitably regressive in their impact on lower earners,” this weekend’s letter is expected to say.
“Unquestionably they will lead to business closures and job losses within a year.
“The increase in employer contributions would have been damaging enough but changing the threshold is far more damaging.
“Without action, many businesses will fail, costing many of the sector’s 3.5 million jobs.”
Please use Chrome browser for a more accessible video player
Reeves: ‘Raising taxes was not an easy decision’
Among other potential signatories to the letter are said to be Pizza Hut’s largest UK franchisee, Oakman Inns, Tortilla Mexican Grill, Fuller’s and Elior UK, the contract catering giant.
The Revel Collective, which recently changed its name from Revolution Bars Group, is also among those asked to sign it.
The letter calls on the chancellor to create a new employer NICs band of 5% for workers earning between £5,000 – the new lower tax threshold – and £9,100, and to exempt employers from paying NICs on lower-band taxpayers who work fewer than 20 hours a week.
It also asks for an early implementation of business rates reform, or for the Treasury to reverse the temporary increase in VAT from 17.5% to 20%.
“Your stated intent is to rebalance the tax burden away from high street businesses, yet this change to NICs does the opposite, balancing the books on the backs of the high street businesses which provide jobs to all in society, nationwide, while sparing businesses that used technology to shed jobs,” the draft said.
“We understand that these proposals come at a financial cost, but we are absolutely firm in our belief that the business closures and job losses that would result from inaction would be substantially more expensive, for the economy, for society and for the public finances.”
Keep up with all the latest news from the UK and around the world by following Sky News
Sky News revealed this week that some of Britain’s biggest food retailers believed that price rises from next April, when the tax changes come into effect, were inevitable.
Executives at Marks & Spencer and J Sainsbury both subsequently confirmed that possibility when they reported financial results to the City, while Tim Martin, the veteran chairman of JD Wetherspoon, said: “All hospitality businesses, we believe, plan to increase prices as a result [of the Budget].”
Hospitality groups are understood to have told their respective trade association that they may be forced to pass on some of the higher taxes in price increases, although the draft letter also highlighted the belief that customers “are at the end of their ability to pay more”.
The pessimism which has engulfed parts of corporate Britain since the Budget has taken senior Labour figures by surprise, and has thrown into sharp relief the triumphalism expressed by the new government after last month’s International Investment Summit.
In an interview with Sky News last weekend, the chancellor said “businesses will now have to make a choice, whether they will absorb that [employer NICs increase] through efficiency and productivity gains, whether it will be through lower profits or perhaps through lower wage growth”.
Pointedly, she did not highlight the prospect of higher prices for consumers, with some bosses already publicly warning of a renewed spike in UK inflation next year.
Read more from Sky News:
Why there are so few top female chefs
Bolt drivers win legal claim
Bank of England cuts interest rate but issues inflation warning
Sky News revealed on Monday that Jonathan Reynolds, the business secretary, had faced widespread anger from chief executives on a call to discuss the Budget.
Nick Mackenzie, the chief executive of Greene King, highlighted on the call that the increase in employers’ national insurance contributions would cause “a £20m shock” to the company, while Fullers’ Simon Emeny warned that it would be forced to halve annual investment from £60m to £30m as a result of increased cost pressures.
Rami Baitieh, the Morrisons chief executive, told Mr Reynolds that the Budget had exacerbated “an avalanche of costs” for businesses next year.
This weekend, UK Hospitality declined to comment on the draft letter.
Never wrestle with a pig. You get dirty. And besides, the pig likes it.
Looking at the festive ding-dong that’s broken out between Kemi Badenoch and Nigel Farage, you do wonder if the Tory leader should take on board this famous quote – because there was only ever going to be one winner from this spat.
The Reform UK leader has spent the thick end of three decades dragging his political opponents into fights that ultimately benefit his cause. This is no different.
What would have been a relatively low-key Christmas stunt has been elevated into literal front page news.
Reform UK insiders say that, in turn, is driving more people to the party and pushing up their member count further.
Nigel Farage has spent his career dragging opponents into fights. Pic: Reuters
Part of this is down to news editors grabbing on to any bit of politics that’s around during the quiet period between Christmas and New Year.
Why Badenoch and her team didn’t clock this and hold back will likely bewilder some in her party.
An argument the Tories should have swerved
What’s more, the Tory leader is also currently on the back foot regarding her central accusation that the Reform membership number is fake.
Reform agreed to show Sky News details of their account on NationBuilder – a platform that manages memberships and donations for many political parties.
Please use Chrome browser for a more accessible video player
From September – Farage: I could become prime minister
The number of active memberships in the account portal matched the figure on the ticker – with their website count growing in size shortly after the NationBuilder tally increased.
Sky News also conducted its own analysis on the ticker and found nothing suspicious as it stands (read the full analysis here).
Kemi Badenoch has said Reform changed the coding when people began to point out the alleged discrepancy, but has yet to provide any evidence to back this up.
Either way, this is still an argument the Tories should probably have swerved.
All politicians need to pick their battles
Yes, signed-up members mean more income for a party, but they don’t necessarily translate into wider electoral success. After all, Labour’s membership surged under Jeremy Corbyn, but he still lost two elections.
But that’s not to say both main parties shouldn’t be looking very closely in their rearview mirror at Reform.
The party’s reaction to this row shows a far more professional behind-the-scenes operation than the previous, more ramshackle incarnations of the Farage-led political machine.
Please use Chrome browser for a more accessible video player
Is Reform UK winning the ‘bro vote’?
Talk to long time allies of the Reform leader, and even they sound somewhat surprised by how slick their project has got.
They also point to electoral milestones on the horizon where the party’s results at the ballot box can be objectively tracked – beginning with May’s local elections next year and running through the Welsh Assembly vote in 2026.
There’ll be many more attempts by Nigel Farage to wrestle with his political opponents before then.
The task for the Tory and indeed Labour leaders is to pick their fights and judge how dirty they are prepared to get.
UK
Nigel Farage threatens legal action if Kemi Badenoch doesn’t apologise for saying membership ticker was ‘fake’
Nigel Farage has threatened to take legal action against Tory leader Kemi Badenoch if she does not apologise for accusing him of publishing a “fake” ticker showing Reform UK’s membership increasing to overtake the Conservatives.
The Reform UK leader has reacted furiously to Ms Badenoch’s assertion that he was “manipulating [his] own supporters” with a ticker that is “coded to tick up automatically” after it showed the insurgent right-wing party had gone past 131,680 members – the number of eligible Conservative Party members in its leadership election in the autumn.
He is demanding an apology from Ms Badenoch for the “accusations of fraud and dishonesty” that he labelled “disgraceful”, and said he is “not going to take it lying down”.
Asked by Sky News in a call with journalists if he is going to sue the Tory leader for libel, Mr Farage said: “I’m going to take some action in the next couple of days. I’ve got to decide exactly what it is, but I’m certainly not going to take it lying down.”
“I think it’s an absolutely outrageous thing for her to have said,” he continued. “I know she’s got a very bad temper. I know she’s well known for lashing out at people, but I am not at all happy, and I’m going to take some action.”
He added that he will confirm within two days exactly what this action will be if she does not apologise for the “intemperate outburst”.
Analysis: Badenoch needs to pick her battles
Reform showed Sky News the coding used to link the ticker to the member count within their account on the platform NationBuilder. The demonstration provided strong evidence that the ticker was not automated. Scroll down for the full analysis.
A Tory source told Sky News: “Fake Farage is clearly rattled that his Boxing Day Publicity Stunt is facing serious questions over a fake clock and hundreds of ‘members’ seemingly joining in the middle of the night.
“Like most normal people around the UK, Kemi is enjoying Christmas with her family and looking forward to taking on the challenges of renewing the Conservative Party in the New Year.”
‘It’s a fake’
The row started after Reform UK said on Boxing Day that it officially had more members than the Conservative Party, which Mr Farage, party leader and MP for Clacton-on-Sea, hailed as a “historic moment”, describing his party as “the real opposition”.
Reform UK also shared a video of the membership tracker being projected on to the Conservative Party headquarters in London.
But Conservative leader Kemi Badenoch accused the party of issuing misleading figures: “Manipulating your own supporters at Xmas eh, Nigel?. It’s not real. It’s a fake… [the website has been] coded to tick up automatically.”
Posting on X, she added that the Tories had “gained thousands of new members since the leadership election”.
Reform UK hit back at Ms Badenoch, publishing a screenshot of an online register claiming to show “active memberships”.
Reform UK chair Zia Yusuf also waded into the row, claiming that people whose memberships of the Tory party had lapsed voted in the autumn leadership election that saw Ms Badenoch elected to the role.
In a call with journalists earlier, he repeated the assertion, and after putting out a call on social media for people to contact him if they had voted in the leadership election but are no longer party members, he said he has received “just so many” that he has not yet been able to verify their claims.
Read more:
Over 150,000 migrants have crossed Channel boats since 2018
Machine gun, pistol and hundreds of devices lost by MoD
Ms Badenoch and the Conservative Party have been contacted for comment.
Reform UK has said it will submit to an audit of its membership numbers by one of the “big four” accountancy firms if the Tories do the same.
Farage gets personal
Speaking to journalists earlier, Mr Farage was very critical of Ms Badenoch personally, saying her claim that their membership number ticker had been faked “reflects her personality”.
He labelled her “aggressive” and “liable to lashing out”, and said he thinks she wrote her tweet out of a “slight sense of anger”.
“She’s got to fully disprove this, and she’s going to find life a lot more difficult and bitterly regret putting this out on Boxing Day afternoon,” he added.
A man has been charged with four counts of attempted murder after a car collided with a group of people in London’s West End on Christmas Day.
Anthony Gilheaney, 30, will appear before Westminster Magistrates’ Court on Friday and has also been charged with causing serious injury by driving whilst disqualified, driving a motor vehicle dangerously and possession of a bladed article in a public place, the Metropolitan Police said.
Forensic investigators collect evidence at the scene on Christmas Day. Pic: PA
Items of clothing and blood are seen on the pavement. Pic: PA
Four people were taken to hospital after the incident, with one in a life-threatening condition.
Metropolitan Police officers were called to reports of a crash and a car driving on the wrong side of the road at 12.45am.
The incident occurred outside the Sondheim Theatre, which is the London home of the musical Les Miserables.
Shaftesbury Avenue is at the heart of London‘s West End and the city’s theatre district.
Deputy Assistant Commissioner Stuart Cundy said the suspect was arrested within minutes of the incident “in the early hours of Christmas Day”.
“Since then, investigators have worked tirelessly to build the case and have today charged Anthony Gilheaney with four counts of attempted murder.
“Our thoughts now are with the victims, one of which remains in critical condition in hospital.”
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the fullest version.
You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports9 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway