Tom Kerridge: I don’t know why anyone would open a pub or restaurant anymore

QBritish cuisine is at risk of being taken off the menu as pubs and restaurants grapple with rising business rates and employment costs, Tom Kerridge has warned, as new figures reveal at least three restaurants close every day.

To talk IndependentRevealing the pressures facing business, the celebrity chef revealed that even his famous restaurant empire is barely making money in the current crisis and called on the Labor government to do more.

It comes as hotels, cafes, restaurants and pubs face paying higher business rates following Chancellor Rachel Reeves’ decision to end benefits during the Covid pandemic.

As it first appeared IndependentAfter huge backlash, the Treasury has partially reverted to providing a 15 per cent discount for pubs and live music venues – but many claim this does not cover the increase, while the support also excludes hotels and restaurants.

Other factors such as rising energy bills, food costs and employer National Insurance contributions mean some are struggling to stay open, according to industry leaders, and there is evidence of scrapping 305 closures between January and March.

“I can’t understand why a hospitality business is opening at the moment,” said Mr Kerridge, who now runs a property of five pubs and restaurants after opening his first pub, The Hand & Flowers, in Marlow, Buckinghamshire. “I don’t understand how someone gets some type of business loan or some type of investment… I don’t understand where they see the return on that, how that happens.”

The “absolutely major” challenges he listed include business rates, food inflation, utility bills and the rise in the minimum wage and National Insurance.

And Mr Kerridge said the impact was an erosion of passion and people-focused businesses, including the fine British food they serve.

“What will happen is that quality levels will drop,” he said. “We’ve been in a position over the last 20 or 30 years where British food has been seen as something absolutely extraordinary. We’ve grown to the point where we have the most eclectic, wonderful, wonderful chefs, amazing restaurants, amazing places in the country, but what happens if no one is encouraged?”

“Everything will shut down and it will quickly go backwards as the only people who can afford things become multinationals that mass produce, de-skill and high-quality. [will] disappear.”

Mr Kerridge announced this month’s changes will see business rates charged across his five pubs and restaurants rise by 100 per cent to £500,000. The tax on two Michelin-starred Hand & Flowers will match the rent on Chelsea restaurant The Chalk Freehouse.

While he said “questions don’t need to be asked to begin to be asked” yet regarding future restructuring of the business, he said savings had been made last year, including a 10 per cent reduction in staff numbers. But he said expansion plans were off the table.

Mr Kerridge, a long-time Labor supporter signed a letter Before the election, Sir Keir Starmer’s party was said to be the right choice for growth-generating change. He has held talks with Business Minister Peter Kyle in recent months and is now pressing for VAT to be reduced. “There could definitely be a lot to do,” he said.

He added: “It’s about community spaces. People need hospitality to be there, they need connection, they need friendly people in cafes, they need somewhere to go to celebrate… An after-work pint that so many people enjoy, all those spaces will close and they will disappear. This will have a huge negative impact on communities and happiness within the country.”

Mr Kerridge is not alone in putting pressure on the government.

A group of 50 Labor MPs, politically organized by Labor Knowsley MP Anneliese Midgley, a member of the culture select committee, warned that the rise in business rates poses “existential threats” to the sector.

Meanwhile, the Liberal Democrats called for a 5 per cent VAT cut on accommodation ahead of the Budget last year, and Reform said the tax would be reduced to 10 per cent.

Those in the industry are also making their voices heard.

Last year, after the budget announced business rates would increase, James Fowler, landlord of Larder House in Southbourne, Dorset, banned Labor MPs from his premises in anger at the plan.

This sparked a national campaign in which “No Labor MPs” stickers were sent to thousands of pubs across the country. Weeks later, Chancellor Rachel Reeves announced a 15 per cent cut on business rates for pubs and music venues, followed by a two-year freeze.

Mr Fowler said despite the partial reduction, rates were still up by a third due to a revaluation of rate values. parliamentary inquiry predictions This year will see an average 30 per cent increase in publishable rate values, which will then be multiplied to create the business rate bill.

As a result, he plans to reduce the size of his restaurant after years of cuts to staff numbers and menu offerings. “There couldn’t be a more difficult time to run a restaurant right now,” he said. “We’re doing the best we can, but it feels like we’re getting another hit at every turn.”

Paul Forsdike, owner of Dicky’s Bar and Brasseire, also in Southbourne, said he feared this would remove creativity from British menus. He said that although it was profitable and had an annual turnover of £1.2 million, its bill to the Treasury was £338,000, meaning almost a third of every £1 the customer spent went to the government. Meanwhile, he said he and his business partner received a salary of £21,000 each.

“Restaurants will try to reduce costs with the products they offer,” he said. “You put chicken and salmon on the menu and you know it’s going to go away, but they’re going to want to try other experimental dishes that people want to try, so there’s going to be less time and money for that, and that’s sad because we don’t want all our restaurants to be serving the same dishes.”

Not far away, Andrew Joyce, who runs the Cotswold Merrymouth Inn in Burford, Oxfordshire, made the difficult decision to close his food and drink business, laying off 80 per cent of staff, to focus on events and accommodation.

The 13th-century venue, famous for its Sunday roasts, told customers: “Due to the very poor political and economic situation, as well as the additional costs the UK government is imposing on hospitality, “Our daily food and beverage business will remain closed while we make some changes to alleviate extra costs and regulations.”

The climate has also affected communities that want to keep their bars open. In Horncliffe, near Berwick-upon-Tweed, locals raised more than £300,000 to buy a closed pub called The Fishers Arms. However, the village cannot find a landlord to undertake this work.

Further confirmation of the challenges facing the sector came this week with a report from marketing firm NIQ showing that the hospitality sector was losing more than three licensed premises a day in the first three months of this year.

Given regional distribution Independent It showed London and Scotland were proportionately worst affected, with both losing 0.4 per cent of their licensed accommodation.

On Tuesday, Dorset landlord Andy Lennox, who runs the Old Thatch in Wimborne, took his campaign for a cut in VAT to London and met with government and business leaders to press for the tax to be reduced to 13 per cent.

Mr Lennox, who runs a hospitality networking group called The Wonky Table, said VAT on accommodation should be in line with Europe, where the average bill is 13 per cent. “VAT is by far the largest tax on businesses and is starving pubs, restaurants and hotels of profits,” he said. “We urgently need this to change to help our businesses grow in the current environment.”

Meanwhile, UKHospitality chief executive Kate Nicholls warned that around two-thirds of businesses were expected to see redundancies as a result of rising employment and energy costs, as well as rising business rates.

He said: “Hospitality already carries the highest tax burden of any sector in the economy, and rising costs are putting pressure on a sector that supports millions of jobs and supports local communities across the country. “Without meaningful action, more businesses will be forced to reduce opening hours, cut staff or close completely.

A government spokesman said: “We have a sound economic plan – reshaping business rates to support hospitality with a £4.3bn support package to limit bill increases, as well as capping Corporation Tax at 25 per cent, cutting red tape and taking action on the cost of living to stimulate the sector.

“Increasing the National Minimum Wage would increase pay for more than 200,000 young workers and result in lower employer NICs for hiring under 21s.”