Hospitality urges sweeping reforms ahead of Autumn Budget

The sector warns short-term fixes will not address structural cost pressures.

The UK hospitality sector is calling for meaningful support in the Autumn Budget, warning that temporary reliefs will not fix the structural pressures dragging on sales and investment.

Sales have been flat all year, with operators leaning on discounts to keep customers through the door, a strategy that has further squeezed margins. 

“The leisure and hospitality industry will be hoping for a budget that boosts consumer confidence and offers some respite to a sector which has borne the brunt of this year’s tax rises,” said Saxon Moseley, partner and head of leisure and hospitality at RSM UK.

Top of the industry’s list is overdue reform of business rates. Moseley said operators want wide-ranging changes, including a permanently lower multiplier, rather than incremental adjustments. With only targeted reliefs expected, confidence in long-term investment remains limited.

Rising labour costs are another immediate concern. April’s increase in employment costs disproportionately hit hospitality, and a further uplift to the national minimum wage, or the removal of age bands, could intensify the strain. Moseley warned such changes risk fuelling inflation and prolonging higher interest rates, dampening consumer spending.

The delayed Budget has also created uncertainty in the run-up to Christmas, with some households holding back on discretionary spending. The sector says a higher VAT rate than European competitors continues to suppress demand, and argues that cutting it would offer an immediate boost to trading and investment.