It seems highly likely that former Mayor of Greater Manchester, Andy Burnham, will become the next Prime Minister by the end of July. Due to the lack of any serious challengers, Burnham has not had to voice any serious policies, other than committing to manifesto promises and fiscal rules already set out.
Despite the lack of published policies, Burnham has supported certain initiatives and proposals in the past that could directly influence the hospitality sector.
Challenging Times For The Hospitality Industry
The hospitality sector has been hit by a swathe of problems in recent years. Operating costs, most notably energy costs, have risen sharply, especially over the past two or three years. National insurance, minimum wage, and business rates have all risen.
While Chancellor Rachel Reeves announced temporary VAT relief, it only lasts through the summer and applies to a limited number of items. It may bring limited, short-term relief, but it won’t save the industry.
The World Cup will bring more visitors to venues, but the bump will be short-lived. And there is a real fear that numbers will drop substantially after the July final.
The same cost increases that have hit venues have also hit potential punters. Energy and food costs have risen, while take-home pay has dropped in real terms. Research also suggests more people are choosing to stay at home because it offers a more peaceful evening.
The evolution of online technology has also had a hand, with multiple TV, movie, and music streaming options available. Mobile and online gaming have also risen in popularity, while online live casino games bring games like roulette and blackjack straight to players’ homes.
Andy Burnham Policies
The sector has been calling for a permanent VAT reduction, to bring the rate down from its current 20% to 10%. That figure would match most of the rest of Europe, although Germany goes further than this with a 7% rate. Groups like UKHospitality argue this would help lower operating costs and reduce prices to help attract more visitors.
A permanent reduction in VAT would help convince people to head back into pubs, restaurants, and other venues. When he was still the Mayor of Greater Manchester, Andy Burnham supported the 10% VAT reduction.
A group of hospitality industry figures established the VAT’s The Problem campaign and gathered more than a quarter of a million signatures. They have backed Burnham’s bid to become PM on the back of his tax stance.
Burnham also called the Chancellor’s decision to increase employer National Insurance rates the “wrong decision”. While it is unlikely he would completely reverse the changes, he may water them down, effectively helping reduce some of the overheads associated with running hospitality businesses.
However, not all of the Labour politician’s likely policies would provide long-term benefit. He has called for the creation of a land value tax, which could potentially see property owners increase rental rates for business tenants.
There have been calls for a meaningful reduction in business rates, but all Burnham has promised is to cut business rates for pubs and for family-run businesses.
Source: Unsplash
