31/10/2026
A few thoughts on the Budget from a small hospitality business…
We don’t particularly want to be writing another post about the challenges facing hospitality, but following this week’s Budget, we feel there are a few things worth saying.
Another increase in minimum wage, another increase in alcohol duty, employers’ National Insurance continuing to put pressure on staffing costs and still no reduction in hospitality VAT.
But it’s okay, because we’re getting some help with business rates! 🙃
And don’t get us wrong, that help is absolutely welcome. Every little bit makes a difference. But when you look at the bigger picture, it feels rather like giving with one hand and taking with the other.
And perhaps what’s most disappointing is that, for a little while, there was actually some hope.
Comments from Andy Burnham about supporting pubs and hospitality gave the industry reason to feel cautiously optimistic.
There was hope that the Budget might finally bring some meaningful changes, particularly to hospitality VAT, something the industry has been calling for over many years.
So we waited.
And while there has been some welcome support announced through business rates, the reduction in VAT that so many businesses had hoped for simply didn’t materialise.
We understand that the country’s finances are under enormous pressure. Government borrowing is expensive, national debt is substantial, and nobody wants to see the country plunged further into financial difficulty.
We’re certainly not suggesting the government should simply borrow billions more without considering the consequences.
But surely there’s a balance to be found?
Let’s talk about minimum wage.
We are absolutely in favour of people earning a decent living. Our staff work hard, they’re the backbone of our business, and they deserve to be paid fairly.
But here’s the problem.
Hospitality is an industry where a large proportion of employees earn minimum wage or close to it. Every increase therefore has a significant impact on staffing costs, particularly for smaller independent businesses.
And it’s not just the hourly wage. Employers also have National Insurance contributions, pension contributions, holiday pay and all the other costs associated with employing people.
We don’t object to paying people more. We object to a system that makes it increasingly difficult to employ them in the first place.
Because while increasing minimum wage sounds wonderful in principle, what happens when businesses simply cannot afford the additional costs?
Hours may get reduced. Vacancies aren’t filled. Businesses operate with fewer staff.
So while someone might earn more per hour, they could end up working fewer hours and taking home little more than they did before.
Surely that defeats the object?
And then there’s the customer.
We could simply put our prices up to cover the increases. In fact, like many businesses, we’ll probably have little choice but to increase some prices.
But our customers are facing exactly the same financial pressures.
Energy bills, food shopping, mortgages, rent and the general cost of everyday living have all put enormous pressure on household budgets.
People only have so much money to spend.
If going out becomes more expensive, people don’t magically find more money. They simply go out less often.
And so the cycle continues.
Businesses increase prices to survive, customers visit less frequently, businesses take less money and eventually more jobs and businesses are put at risk.
Who actually benefits?
We fully appreciate that the country has enormous financial challenges and that money needs to be raised to fund public services.
But surely there needs to be a wider conversation about where that money comes from?
Could more be done to close tax loopholes and ensure large multinational companies contribute fairly?
Could the tax system be reviewed to ensure the burden is shared appropriately, including by those earning the very highest incomes?
Could the benefits system do more to support those who genuinely need help while encouraging and supporting those who are able to work?
Nobody should be left homeless, hungry or without the support they genuinely need. Equally, we need a system that makes working worthwhile.
These are complicated issues, and we certainly don’t pretend to have all the answers.
But supporting small businesses shouldn’t automatically have to mean borrowing more money. Surely it should also mean looking carefully at how the money already being raised is spent, where the tax burden falls and whether the system is genuinely fair.
Because right now, it feels as though small businesses and ordinary working people are continually being asked to find just a little bit more.
And eventually, there simply isn’t any more to give.
Continually increasing the cost of running a small business isn’t a sustainable solution.
Hospitality isn’t just about pubs, restaurants and cafés.
It’s about jobs, young people getting their first experience of employment, local suppliers, communities, friendships and places for people to come together.
Look around our towns and high streets. Every independent business that disappears takes a little bit of the community with it.
We’re not asking for special treatment. We’re not asking for our staff to be paid less. And we’re certainly not asking customers to spend money they haven’t got.
We’re simply asking for a system that allows businesses to pay their staff fairly, charge their customers reasonably and still have enough left to keep the doors open.
Because surely that shouldn’t be too much to ask?
And finally, to everyone who continues to support us and other local businesses, thank you. ❤️
We know times are tough for everyone, and your support really does mean more than you probably realise.
The Thackeray ❤️
