'I feel neglected by the government': Hospitality reacts to 'disappointing' Budget

The hospitality industry has hit out at the government for its "disastrous" Budget that failed to offer support to thousands of struggling businesses.

While chancellor Jeremy Hunt froze alcohol duty and announced a cut to National Insurance, he ignored calls for a reduction in hospitality VAT and failed to reintroduce VAT-free shopping for overseas tourists.

Many in the industry called the announcement a missed opportunity to support the sector and warned it would lead to more job losses and closures.

The Caterer has rounded-up some of the industry reactions below.

Anna Haugh, chef-patron at Myrtle restaurant

"Quite a few of us had heard whispers that VAT might be reduced for the hospitality sector. I can't help but say I'm so disappointed. For a restaurant like mine, [a VAT cut] would have such a big impact on helping us through hard times.

"I feel neglected by the government and kind of ignored. I've got 15 members of staff on my payroll that I'm responsible for and it's stressful at times.

"We need some sort of relief to help us with the spiralling costs. It's very hard to grow at the pace your restaurant should be growing when everything keeps getting more expensive. There's only so much you can pass on to the customer as well."

Karis Theophane, founder of Jerk Grill

"I'm totally not surprised [by the announcement] – the revolution and evolution of hospitality is in our hands."

Sam Harrison, owner of Sam's Riverside and Sam's Kitchen restaurants

"We needed a reduction in VAT. We needed more support for hospitality. Disappointing and again shows lack of understanding from government towards the industry and small businesses. Most of us are working harder than we ever have to just survive and in my case, keep 120 employed. Where is the support?"

The Dodo Micropub (@thedodomicropub on X)

"Not really surprised myself but what it means is many hospitality businesses will have lost their final thread of hope that things may get better and another wave of closures will come. That's on this Government. But they really don't give a shit do they!"

Martin Williams, chief executive of Gaucho and M Restaurants

"Sadly, chancellor Hunt has once again ignored our sector which employs over three million people and is an important part of our society and offered no meaningful support. Thus, at Gaucho we have made a decision to remove VAT off all lunch bills every Friday.

"An empty Budget in terms of both ideas and support for the hospitality sector."

David Orr, chief executive of Resident Hotels

"We are disappointed that the Chancellor has failed to reinstate VAT-free shopping for tourists visiting the UK, despite evidence that doing so could encourage more visitors and spending. [There is also] evidence that France and other EU states are actively encouraging visitors with state authorised apps designed to bundle lower value goods, puncturing the myth it's all about luxury.

"The return of VAT-free shopping could have helped create an additional pull factor at a time when inflationary pressures are driving travel decisions."

Chris Jowsey, chief executive of Admiral Taverns

"Over the past years our licensees have worked tremendously hard to overcome every obstacle that has been thrown at them and they now face a frightening rise in costs which will likely result in hundreds of pubs closing for good."

Fergus Stewart, chief executive of the Landmark London

"It is great to see the alcohol tax duty freeze extended and that the chancellor has heeded the advice of many experts within our industry, a win for all those who buy and sell alcohol in the short term. I would like to see the government strategically think long term to help avoid any negative impact on the wine industry in particular post Feb 2025."

Greg Hegarty, co-chief executive of PPHE Hotel Group

"The Budget represents a missed opportunity for the UK's hospitality and tourism sectors.

"At a time when bold steps are required to help the recovery and growth of these critical industries, the measures— or lack thereof—significantly fell short.

"The decision to maintain the 20% VAT rate, coupled with the absence of other supporting initiatives to counteract the deterrent effects of the 'tourist tax' and the implications of Brexit on the VAT retail export scheme, signal a concerning disregard for the challenges these sectors face. Moreover, the forthcoming complexities in wine taxation only add to the burden.

"Such decisions not only undermine the competitiveness of the UK as a premier tourist destination, but also overlook the crucial support needed by businesses striving to recover and thrive post-pandemic, especially in this high inflationary environment.

"This calls for a reassessment of fiscal strategies to ensure the hospitality and tourism industries are adequately supported, fostering growth and sustainability in these pivotal sectors for the overall British economy."

Kate Nicholls, chief executive of UKHospitality

"The Chancellor missed a real opportunity today to show that he backs hospitality and understands the real pain that operators are enduring.

"He had a chance to accelerate and unlock hospitality, but instead he has delivered a cut-and-paste Budget, maintaining the status quo which continues to act as a drag on recovery.

"Government needs to take a different approach. It needs to bear down on the never-ending rising costs that are forcing businesses to shut their doors for good – taking away people's livelihoods and robbing communities of a vital asset.

"A lower rate of VAT would have been a bold reform that would drive economic growth, keep prices down and unlock investment in the sector, one that was projected to grow six times faster than the economy as a whole. It would have been good for businesses, the public and the economy.

"Hospitality is a sector proven to be a catalyst for growth across the entire nation, as the foundation of the everyday economy. When we perform, the entire economy performs. It's a great shame that the Chancellor has not recognised that today."

For a rundown of some of the key points of the Budget, click here.