More than a year into a new government, the time for settling in is over. Now is the time for action. For the hospitality sector – the beating heart of our high streets, our communities and a powerhouse of the UK economy – the upcoming Budget represents a critical juncture. 

 

The government has a clear choice: to continue with a tax strategy that has already cost our economy tens of thousands of jobs, or to work with us to unleash the immense potential of our industry to drive national growth, create careers and revitalise our towns and cities.

The consequences of the most recent fiscal events are not a matter of speculation; they are a harsh reality. In the seven months between the Budget in October 2024 and May 2025, the hospitality sector has lost a staggering 69,000 jobs. 

 

To put that into perspective, this is a dramatic reversal of the 18,000 new roles we proudly created in the same seven-month period the year before. Businesses that were engines of opportunity are now being forced to make devastating choices. Our recent member survey paints a grim picture: one-third of hospitality businesses are now operating at a loss, 60% have had to cut jobs and 40% have cancelled or reduced their investment plans. 

 

When our pubs, restaurants, hotels and cafes are struggling under an unfair tax burden – paying as much as 71% of pre-tax profit in tax – it’s the entire country that misses out. We are a unique industry, a cornerstone of social productivity that creates jobs and opportunity for everyone, everywhere. We provide first jobs for young people, flexible work for those returning to the jobs market and build careers that can take you from the kitchen floor to the boardroom. Our contribution is not confined to major cities; it is woven into the fabric of coastal towns and rural communities, generating £140bn in economic activity annually. But we are being taxed out of existence. 

 

We want to get back to growth, but we cannot do it alone. We need a fair deal from the government and, as we launch our #TaxedOut Budget campaign, we are calling for three essential policy changes that will finally unlock our sector’s potential.

 

First, we must lower business rates to revive our high streets. The current system actively punishes businesses for operating on the high street, the very places we want to see thrive. We are calling on the government to implement the maximum discount for hospitality businesses with a rateable value under £500,000 and exempting larger properties from the planned surcharge, to ensure the reforms truly deliver the intention to level the high street playing field. 

 

Second, we need to fix national insurance contributions (NICs) to boost jobs. The changes announced by the chancellor at the last Budget to employers’ NICs were poorly designed and disproportionately penalised sectors, like ours, that provide accessible careers. That is why we are calling for government to boost jobs by extending existing NICs exemption to include both young people and people moving from welfare to work. This would directly support job creation and help reduce the national benefits bill. 

 

Finally, a lower rate of VAT on hospitality would drive investment and international competitiveness. While our European counterparts benefit from an average hospitality VAT rate of between 10% and 13%, UK businesses are shackled to a 20% rate. This puts our vital tourism industry at a significant disadvantage and makes it more expensive for people to support their local businesses. Following the lead of the majority of European nations by reducing VAT on our sector would be a direct injection of confidence, encouraging investment and growth. 

 

The path forward is clear. The government cannot continue to pursue a course that has seen jobs plummet and investment dry up. We need an intervention, comprised of targeted and sensible reforms. This Budget is an opportunity to change course and stop taxing out growth. It needs to allow hospitality to invest in the people, communities and businesses that create places where people want to live, work and invest. Hospitality is being taxed out, but it is ready to lead the charge for economic recovery, if the chancellor is ready to give us the tools to do the job. 

Headlines over recent years have repeatedly, and rather weakly, punned how Greggs has been on a roll as its sausage meat filled pastry delicacy has fuelled the rollout of new stores across the country. As such, Greggs has been able to keep returning to the oasis of store openings.

 

Since former chief executive Roger Whiteside repositioned the company from a regional bakery business to a national food-to-go brand, the store number target has constantly been increased on the back of an apparently insatiable appetite from consumers for its value-led staples.

 

While the good times have indeed continued to roll, the aggressive store opening strategy has not been questioned. Greggs is hardly unusual in succumbing to the belief (supported by the City) that it can almost keep opening ever more stores. In the past year, it has opened 87 outlets and closed 56, leaving it with a total of almost 2,650 units, and it has stated it has confidence in achieving its ambitious target of opening between 140 and 150 net new outlets this year.

 

Infilling in major cities, opening in smaller towns, developing multiple formats to cover all bases and expanding the menu in order to help justify lesser store locations have all contributed to the confidence behind its ongoing expansion. 

 

But with sales having fallen back in June, the City analysts have taken a turn. Dan Coatsworth, investment analyst at AJ Bell, says: “Investors [are] asking if we’ve reached peak sausage rolls territory, and the latest trading update is only going to add to market fears.” Meanwhile Alex Duran, analyst at ThirdBridge, suggests it is possible Greggs has “surpassed its optimal store count”. 

 

He reckons the company should now focus on refreshing its ageing store estate rather than continuing investment in new units. Greggs is hardly the first retailer or hospitality company to come to a crossroads in how it handles its property strategy, as outlet numbers start to rack-up and the micro and macroenvironments change the game.

 

Giggling Squid has been having a rethink of its growth strategy as it hit 50-plus restaurants. Co-founder Andy Laurillard has stated that labour costs have brought into focus the question of how much further the brand can grow. It has found sites in secondary market towns are not as viable as they once were. This has cast doubt on its previous plan of reaching 150-160 sites across the country. It has prompted a consideration of instead targeting a smaller number of larger sites, alongside investing in its existing estate to leverage more value out of these units – through relocations to larger sites in the same city/town or through extensions. 

 

Such actions can prove extremely lucrative, as proven by JD Wetherspoon, which had seemed to be on route to UK domination through sheer pub numbers – hitting 950 sites in 2014 – as it powered ahead with its roll-out. But then it changed tack, and in the 11 years since, it bought only 42 freeholds and 14 leaseholds while it sold 207 pubs, according to Lavender Bank Partners, which found that between 2011 and 2024, Wetherspoon has bought, sold or bought in the freeholds of an impressive 620 pubs. 

 

After all that activity, it today operates a lesser 820 pubs, having boosted the number of freeholds, skewed to larger premises, removed cannibalisation in smaller towns (dubbed a proximity thinning disposal process) and closed half its pricey airport concessions, while instead focusing on opening further pubs in train stations.

 

The upshot of this is a business in a much healthier state. Geof Collyer, founder of Lavender Bank Partners, suggests its mammoth restructuring exercise has boosted profitability, improved gross profit margins, reduced central overheads and improved conversion of incremental sales per employee into incremental Ebitda per employee. Collyer hoped the estates team at Wetherspoon received a big bonus for its efforts.  

 

Maybe not yet, because Wetherspoon is not finished. Although it has a target of 1,000 outlets, this number is based around the company having shifted its focus away from heavy capex activity and chunky overheads to now include franchises – having proven the model with university campus sites and Haven caravan parks – and also running the food and beverage proposition within hotels.

 

Greggs and other consumer-facing businesses reliant on physical footprints can learn plenty from Wetherspoon in how to manage property portfolios with a strategy that does not predominantly rely on simply opening more units. As Greggs has just found out – you can only roll with it for so long before the headlines change.

Hospitality is in a moment of reckoning – especially if you’re an independent operator. We all know the challenges, they’ve been listed a million times – labour shortages, rising costs and shifting consumer habits. But what doesn’t receive enough attention is the widening gap between talent and opportunity.

 

While the sector is full of brilliant ideas and diverse voices, too many of them never get a fair shot. And nowhere is that more apparent than in London, where the cost of starting something new continues to climb. We’ve seen this story before, and we’ve also seen what happens when someone rewrites the script.

Almost 25 years ago, Jamie Oliver launched Fifteen, a restaurant that doubled as a training ground for young people facing disadvantage. It was radical for its time: a high-profile chef using his platform to provide real opportunity in a real kitchen. Some of those young chefs went on to build incredible careers and restaurants of their own. And while Fifteen itself may have closed, the legacy it left behind still ripples through the industry today – proof that hospitality can be transformative.

At Kerb, we’ve always believed in that potential. In 2023, we set up Kerb+, our not-for-profit social enterprise, to scale the work we were already doing to support raw talent. Since then, we’ve delivered thousands of hours of free training, mentoring and funding to people facing some of the toughest entry barriers: refugees, ex-offenders, young people out of work and those experiencing homelessness. And we’ve done it all without having our own kitchen or training space – yet.

Now, we’re taking our next step: creating a dedicated hospitality hub in Central London. This won’t be another food hall. It’ll be a community hub – a shared kitchen, classrooms, mentoring space, co-working areas and a place where people can cook, collaborate, test ideas and build their futures. Think supper clubs, industry talks, training sessions and fundraisers. Think social mobility, baked into the bricks.

We know this approach works. Our journey with Seven Dials Market – where more than 50 independent businesses have traded, with many progressing to set up their own successful bricks and mortar sites – has shown us what’s possible when independent operators get the right support at the right time. Meanwhile, 65% of our current traders there are female-founded, and half came through our free incubator accelerator. That’s no accident. It’s proof that when barriers fall, raw talent seizes the opportunities that arise.

But these kinds of ideas need space – and the industry needs more of them. Fifteen wasn’t just about a restaurant. It was about a belief: that hospitality can be a platform for change, not just profit. That belief still resonates today – you’ll hear it echoed in the work of organisations like Migrateful and Cook For Good – but we need to go further, and we need infrastructure to do it at scale.

That’s what this hub is about: creating infrastructure for impact. A physical space that’s not only about food, but about access – where the right environment can unlock someone’s potential and transform their trajectory. We already work with more than 47 charities. We’re a London Living Wage employer.

 

Last year alone, our ecosystem generated nearly £33m in revenue for 157 independent businesses. But we believe we can do even more with a permanent home for social impact – and with the right people around the table. So, this is a call to action. It’s harder than ever for independent businesses and social enterprises like ours to secure space in Central London.

 

So, if you’re a landlord that wants to make a massive impact on independent hospitality – get in touch. Equally, if you’re a supplier with surplus kitchen equipment, a funder who believes in social innovation or someone who can remember benefiting from similar organisations in your own career – this is your moment to get involved. 

London’s food culture is one of its greatest assets, but it needs protection and reinvention. And if we want a truly inclusive, independent hospitality sector, we need to back it – not just with platitudes, but with real opportunities and real places to grow.

We’ve always believed that brilliant food can change a city. With this new campus, we want to prove that, given the right support, it can change lives too.

We have just concluded an investigation by HM Revenue & Customs (HMRC) into minimum wage compliance at our small group of restaurants. The investigation has taken nine months, with HMRC conducting a very thorough and intense review of our whole business. HMRC looked at payroll records and rota records to check that what was on the rota was actually then paid.

 

Officials interviewed staff to check that the times on the rota were the actual times worked, and that we weren’t removing worked hours. HMRC fully investigated all of the areas where it hoped it might find something wrong. Did we uplift to new rates on the right date? Did we uplift rates when people moved age brackets? Did staff provide their own workwear that required us to pay above the minimum wage? Did we correctly pay people when they moved from hourly to salaried?

 

It felt a bit like being followed by a police car; you think you are doing everything right, but then start to doubt yourselves the longer the police car follows you, thinking through everything you might be doing wrong and conducting a mental checklist. Over the course of the investigation, we started to doubt ourselves and thought we might have overlooked something. Had we paid people correctly when they transferred between sites? Were our contracts correct about the place of work? Had the S4 system worked correctly in all cases, or had we incorrectly put someone’s birthday into the system and underpaid them? All those things kept us slightly worried.

 

I understand that HMRC investigations are often triggered by reports from former employees. Of course, these reports may stem from genuine concerns or misunderstandings. While we can’t be certain of the reason behind our investigation, we approached the process with full transparency and, regardless of the origin, it served as a valuable opportunity to really test our compliance system.

 

I was, of course, very relieved to finally get a clean bill of health after its latest rounds of checks. Given the time it took, I had half expected HMRC to never close the investigation and leave us nervously hanging in the air forever. It was clearly very disappointed. I think from the way the officials behaved, they normally find an error somewhere, and they know where to look. Without a system, I would be sure that we would have missed a birthday somewhere, which I think would be the most likely error. 

 

But the way officials looked at any change from hourly to salaried suggests that this is also a common place for operators to fall. The time they spent checking that the rota'd hours worked were the actual hours worked by the employee also suggests that is a difficult area for our industry.

 

The fine structure for any failure is a maximum of £20,000 per worker, and any errors investigated need to be paid back over the six years HMRC can go back in its investigation. I assume that when it finds one fault, it will then look at whether that fault is repeated across the whole employee base. The minimum fine is £100 per employee, but even if you have, say, ten employees and a staff turnover rate of 100%, then over six years, you may well have had 60 staff, so you are already at £6,000. Scary stuff.

 

So, what are the actions we can all take? Never having an aggrieved worker seems impossible. We will all typically take on someone who doesn’t work out and is unhappy about being dismissed, so really it is about having excellent process and procedures to ensure that the legislation is complied with.

 

I am interested in how HMRC might determine any failures in hours worked versus hours paid, but luckily, we won’t get to find out. As the minimum wage increases, a higher proportion of staff will be paid the minimum wage, and as such, our risks and potential fines go up. I hope HMRC won’t be back to visit us soon, but hopefully this may serve as a reminder that we all need to make sure we have all the right checks in place.