It’s a very significant day today as Rachel Reeves in a few hours will deliver Labour’s first budget in almost 15 years. As the chancellor sets her sights on raising funds to repair UK public services, she could also be poised to present one of the largest tax-raising budgets in decades. Reeves is expected to announce a number of “difficult but necessary decisions” to restore economic stability.
After much pessimism since July’s election, the chancellor has hinted she could strike a more optimistic note today, saying: “My belief in Britain burns brighter than ever. And the prize on offer today is immense. More pounds in people’s pockets. An NHS that is there when you need it. An economy that is growing, creating wealth and opportunity for all. Because that is the only way to improve living standards.”
Many signals over recent days and weeks have been highlighted to indicate what could be in her budget. Those hoping for some relief following on from 14 years of economic mismanagement from her predecessors will doubtless hang on her every word.
The UK hospitality and catering industry has been blighted in recent times through numerous episodes of economic and political turmoil. Reeves needs to instil confidence back into an industry through steering a path that embraces growth and settles nervous investors.
Yesterday the chancellor announced more than 3 million people will receive a pay boost after the confirming the National Living Wage will increase from £11.44 to £12.21 an hour from April 2025.
Following the announcement Kate Nicholls, Chief Executive of UKHospitality, said: “These wage rises are well above expectations, and make the Budget even more important.
“It’s an added £1.9 billion to the hospitality wage bill, on top of the cost of the Employment Rights Bill and, if rumours about the Budget are true, employer NICs and business rate rises.
“Trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage – threatening jobs, future investment, price increases for consumers, and business viability.
“Businesses will be approaching tomorrow’s Budget with even more trepidation following this news. Our companies desperately want to be able to support higher wages for staff but what is being asked of them is simply unsustainable if taxes are going to shoot up at the same time.
“In light of this, it’s paramount that the Budget includes targeted measures to support the high street and the cost burden it is facing. That must start with addressing the broken business rates system and implementing a lower, permanent and universal level for hospitality.”
From the announcements already made today’s budget seems bleak, let’s hope that a silver lining has remained in her red box to be unveiled from the front bench later.
