This isn’t a plan for business, it’s a Budget to save Reeves’ job
Sacha Lord, a former advisor to mayor of Manchester Andy Burnham, bitterly regrets calling Labour “the party of business and growth”
On 13th of June last year, I was stood in Manchester’s impressive NOMA building.
It was the Labour Party’s manifesto launch. The place was a buzz with energy, excitement and hope. The full shadow cabinet were there, every Labour Mayor, every Labour MP and every journalist that graces our TVs and airways.
Rachel Reeves stood up and promised the room “a pro growth, pro business Labour government”. After a decade and a half of chaos, mismanagement and economic stagnation, it felt like a new administration would be the knight in shining armour that my sector, hospitality, desperately needed.
I listened intently to the speeches and left feeling invigorated. As I sat in my car, ready to drive home, I tweeted that this was the “party of business and growth”.
Millions of people agreed, taking the now Chancellor at her word, and voted accordingly.
It’s a tweet I bitterly regret pressing send on. Reeves’ actions in government couldn’t be further from the false promises she made that day. As a result, trust in politics is now at an all time low and that includes in the aftermath of partygate, when Downing Street became the most fined street in the UK during lockdown.
We need a new way of doing politics, where politicians are less tribal and actually put place before politics. This is very much the case in Greater Manchester, where our leaders, from different parties, work together. The result? We are now performing economically better than any other city region in the UK.
Just wrong
The Budget this week feels awkward. It doesn’t feel like a plan to help save the country; it feels more like a campaign to save Cabinet jobs. It’s just wrong.
What we desperately need is policies that support enterprise, recognise the importance of economic growth and backs the sectors that make the UK what it is.
Hospitality is the fifth biggest sector in the UK and the third largest employer. Since the last disastrous Budget, we’ve lost over 110,000 jobs. Many of those jobs have been taken away from young people. Pubs are having to sell pints at an all time high, averaging £6.50 in Manchester – I’ve even heard £8 in London. Yet once you’ve taken into account all the costs, the taxes and overheads, the average profit on a pint is just 12p. As it stands, the alcohol duty on a pint is 20 times that of a pint in Germany. It’s no wonder we are losing a pub a day.
Trust in politics is now at an all time low and that includes in the aftermath of partygate, when Downing Street became the most fined street in the UK during lockdown
The recent announcement from the government, that pubs can stay open longer shows exactly how out of touch they are with the sector. Pubs simply can’t afford to stay open and pay staff up for longer; especially after the disastrous hike in National Insurance.
I’m not sure who they have been engaging with, but it’s simply not working. My advice would be for the government to officially recognise the Institute of Hospitality by giving them Chartered Status, and to appoint a Hospitality Minister – someone that has experience of working within the sector.
If the Chancellor had listened and worked with the sector, she would introduce a sector specific hospitality VAT rate, similar to the vast majority of countries across Europe. She’d reverse the damaging National Insurance increase and finally reform Business Rates. Business Rates reform is coming as it’s already been announced, but we’re still waiting to see the parameters. My guts telling me it will lower the bills for small venues – which is absolutely welcomed – but penalise the larger venues, like nightclubs.
My feeling is that hospitality’s about to be sidelined again. I’ve been in this industry for over 30 years and have never known the sector to be so demoralised.
I’m sadly expecting a raft of closures come January. Operators are broken. It’s not just their finances that are shattered, it’s also their mental health.
At least with the Budget out of the way, it’ll stop the endless flurry of leaks, which only stagnate any investment.
I’ll be watching the Budget very closely, in the hope that the politicians stick to the promises they made to the electorate. No more tax rises. Not having to come back for more. I’m not holding my breath.
Sacha Lord is founder of The Warehouse Project/Parklife, former night time economy adviser to the Mayor of Manchester, chair of NTIA and author of Tales From the Dancefloor