By Chris Dines, finance director, William Murray
I’m not sure that the analogy works because businesses don’t have a vote, but I like to think of Government formulating a tax raising “product” they have to market and sell, with companies being the buyer. Effective marketing is about providing a structure that supports and drives business growth and increases revenue.
I find it difficult to comprehend the extent that Government ignores sales and marketing best practice, or any practice, when it comes to the hospitality sector (and no doubt other sectors). The last two Budgets are a case in point.
The private sector accepts there are taxes, National Insurance, business rates and pension contributions to pay. There might be political differences about the overall quantum, of course. However, it’s the lack of engagement with business, and the lack of effective tailoring, that makes matters so much worse. In hospitality (and no doubt retail), where the most impactful Budget changes have arisen, it seems particularly poorly thought through.
One example: the day before last year’s Budget (late 2024), the starting full time minimum salary cost (wages plus NI, but not pension) of a new recruit aged between 18 and 21 was £17,825. That figure will be £23,597 from April next year: a breathtaking 32% increase. With no warning, that’s a seismic change. If the Government had said, pre-election: “Hey, we intend to increase wage costs by 32%, all of which will be left to business owners to fund,” imagine the outcry.
There has been minimal alignment, optimisation or shared objectives in any of these changes. Why doesn’t Government sit with businesses, “sell” their aims, and then find better ways of implementing? I’m sure lots of helpful changes could have been made, while ultimately generating similar results. Perhaps through better phasing or targeting some relief at small business or those with a physical presence.
There’s lots of figures out there, but I suggest the net impact of the Government’s actions is the loss of some 100,000 jobs for youngsters, with all the downsides that come with that.
The industry must rally to ensure hospitality has a great future – we all want more of it after all. But what hard work our Government makes of all this.
