Sacha Lord, the night-time economy adviser for Greater Manchester, has warned that there is a ‘perfect storm tearing through the heart’ of the hospitality industry in the UK and that closures are likely on an unprecedented level
Lord urged the UK government to provide a temporary reduction in VAT on business energy bills to 5% | Photo credit: Tim Mossholder
The UK’s hospitality industry is in deeper trouble now than during the pandemic as it faces rising inflation, increased energy costs and staff wage demands, according to Sacha Lord, the night-time economy adviser for Greater Manchester.
In a Sky News interview, Lord urged the UK government to return to Parliament and provide immediate intervention, including a temporary reduction in VAT on business energy bills from 20% to 5%.
Parliament is currently in a period of recess, whereby neither the House of Commons nor the House of Lords meet to raise, debate or pass legislation. Ministers are not due to return until 5 September.
According to Lord, energy bills in some hospitality venues have tripled, with many expecting extra costs of between £15,000 to £20,000 ($18,000 to $24,000) by the end of the year.
“The hospitality sector is one of the most integral parts of the UK economy, and one which is now in an extremely perilous position, more so than during the Covid pandemic. Trading is now unviable for many and I believe we will see closures at an unprecedented level over the 12 months leading to unemployment on an unimaginable scale,” he said.
In June 2022 a survey conducted by UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping found that only 37% of hospitality businesses in the UK are turning a profit.
In the same month the Office for National Statistics, a UK non-ministerial government department, reported that hospitality businesses in the UK were advertising more than 174,000 vacancies.
Following the pandemic and the curtailment of European labour after Brexit, several UK-based coffee chains, including Costa Coffee, Pret A Manger and EG Group, which owns the LEON coffee and fast-food chain, announced significant investments to boost worker pay in a bid to fill vacant roles and retain staff.