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The boss of Leon has accused Andy Burnham of creating a divide within hospitality by cutting business rates for pubs while leaving restaurants and hotels to face soaring tax bills.
John Vincent, who co-founded the company in 2004, said he could not understand why restaurants had been excluded from the Prime Minister’s flagship support package, claiming Labour was treating businesses with identical customers and costs differently.
He told The Telegraph: “We are very confused as to why restaurants are not covered. They are suffering massively, just like pubs. We all compete in the same market, and we have the same cost structures.
“When you have the same customers and the same costs, it is the classic definition of being in the same business, so this creates a false and unfair distinction. We can only hope Andy Burnham has a plan and that there’s more to come.”
Mr Vincent spoke out after the Prime Minister announced a 20pc cut in business rates for pubs, clubs and live music venues from April next year, a move expected to cost around £100m annually.
‘Not a huge amount of money’
Tom Kerridge, who is spearheading calls for a VAT reduction for hospitality venues, welcomed the announcement but added that “it’s not a huge amount of money for each venue”.
The chef and pub owner said: “The average bill is cut by about £1,000, which isn’t hugely significant in the grand scheme of things.”
He added that neighbourhood restaurants also deserved recognition as community hubs: “The biggest thing that will make a big difference to every single space is that reduction in VAT.”
Allen Simpson, the chief executive of UKHospitality, described the announcement as “a welcome first step” but said restaurants were struggling just as much as pubs, while hotels faced average business rates increases of 110pc.
He said: “Today’s announcement will provide welcome support for pubs, clubs and live music venues, but they only account for around a fifth of hospitality jobs. The rest of the sector now needs to see the same ambition.”
Jon Hendry Pickup, the chief executive of Butlin’s, said: “We’re one of the largest employers in the communities this Government wants to support, investing in UK tourism and creating jobs in coastal economies.
“Businesses and resort operators making that contribution shouldn’t be overlooked simply because of their size.”
Tax experts said the package was more generous than the headline figure suggested because it built on support already announced by Rachel Reeves earlier this year.
Alex Probyn, of global tax firm Ryan, said the 20pc figure combined with earlier relief amounted to “a significant package” for eligible pubs.
Mr Burnham’s intervention has triggered calls for broader business rates support, well beyond hospitality. The boss of Heathrow, which pays the highest business rates bill in Britain, said he would “love” Mr Burnham to be as sympathetic towards travel as he had been to pubs.
Thomas Woldbye, the airport’s chief executive, said its rates bill had jumped by £50m a year under Ms Reeves.
He said: “If they do the same for airports that they’ve done for pubs, it would be really nice. People think travel is important, as important maybe as going to the pub. We don’t want to make it more expensive for them to travel than it already is.
“Taxation has a huge impact on our business and is one of the biggest factors in making our aviation industry less competitive compared to everywhere else in Europe. I don’t think we should add to that. We should try, if we can, to make it more competitive.”
