‘I have no confidence in Rachel Reeves to turn things around’
The chief executive of a luxury hotel group in London has said he has “no confidence” in Chancellor Rachel Reeves ahead of her Budget later this week.
Gavin Taylor, who leads Clermont Hotel Group, also branded Reeves as “not particularly business friendly” and that the Chancellor needs to lower the tax burden on companies in order to stimulate growth.
The CEO warned that his group would continue to invest in the UK but “at a much lower level than we’d expected” because of Reeves’ fiscal policies.
He added that while there are measures that the group has introduced to mitigate the rise in taxes, such as signing a deal with Gordon Ramsay, “there’s a limit to certain things we can do”.
‘Rachel Reeves is not business friendly’
Taylor said: “I have no confidence, I’ll be honest. She’s not particularly business friendly, she’s not hospitality friendly.
“I think she needs to be because it’s the lifeblood of the country.
“We employ huge numbers of people and we do invest quickly when we think there’s a cause.
“But the tax regime needs to be right for us to do that. It’s not a huge criticism of Rachel, I know she’s got a difficult job.
“She’s got a black hole to fill and she needs to get it from somewhere. But I think hospitality is an important industry for the UK and the tax regime needs to be lower.
“For example for VAT, we’re one of the highest in Europe at 20 per cent. We need to get our rate closer to 12.5 per cent.”
The CEO added that Reeves “needs to look at the overall tax burden for UK hospitality and realise that we are being unfairly penalised”.
Asked whether he thought the Chancellor should resign, Taylor said: “it’s not for me to say. She’s got a difficult job and she needs to find the money from somewhere.
“I can only say that UK hospitality needs help for us to stimulate demand and take our growth to the next level.
“But we’re too heavily taxed and that would be my appeal to Rachel Reeves.”
Too many luxury hotels in London
The boss of Clermont Hotel Group, which includes 14 locations and more than 4,000 rooms, also warned that London’s luxury hotel market is becoming increasingly saturated.
More hotels are opening in the capital but the “demand simply is not there”, the CEO said.
This is leading to luxury hotels making discount offers to potential guests “which was previously unheard of”.
Taylor said that while the market bounced back strongly from the Covid-19 pandemic, it has now stagnated.
The CEO said: “London is the luxury capital of the world. There’s so many luxury offerings.
“There’s always going to be a fundamental strength in London as a market.
“People always want to come here as a destination and you’ve got to have a good broad range of offerings across the hotel market to meet that demand.
“But I think the pendulum has swung too much the other way where there’s too much of a luxury offering in the market currently.”