Subjects: Hospitality has just become a front-line election issue – and that is a very good thing, a sweet proposition, last orders: waking up to pub wakes
Authors: David Roberts, Glynn Davis, Phil Mellows
Hospitality has just become a front-line election issue – and that is a very good thing by David Roberts
Plenty of commentators have been pressing the government to treat the hospitality sector seriously; to stop taking its £62bn annual contribution for granted and to start listening to what it needs in order to continue to grow, contribute to social cohesion and create wealth for employers and employees alike.
While folks like Sir Tim Martin have endorsed Reform’s new policy announcement, others have dismantled it, and others have remained silent. Leaving the politics aside for the moment, Nigel Farage has done the sector a huge favour because he has literally guaranteed that for the first time, the treatment of the hospitality sector is an election issue.
Reform’s position now brings it into line with every other major political party in the UK (other than Labour) in recognising that a 20% VAT rate on hospitality is economically damaging. That leaves Labour increasingly isolated as the only party still defending the status quo. Whether intentionally or not, this places hospitality squarely on the election battlefield.
This sector employs millions, contributes enormously to the nation’s coffers, employs 10% of all London’s workforce, anchors our high streets and acts as one of the most accessible routes into work for young people. Yet for too long, it has been governed as if it were a discretionary extra rather than a foundational part of the UK economy.
The fact that political parties are now competing to support the hospitality should be seen as an opportunity for the sector – but it must rise to meet it.
The industry now needs to come together, articulate its demands clearly and start behaving like the powerful and influential voting bloc it actually is. No political party seeking to form a government should be able to afford to ignore the hospitality bloc. But getting attention is not enough. The demands must be the right ones.
A fair playing field, not bailouts
From my perspective, the central demand should be simple: a fair playing field. The hospitality sector does not need handouts. Handouts actually stem the glorious Darwinian qualities of the sector as older concepts bow out and new and innovative ones take their place. The sector does not need special treatment in my view; it just needs to stop being penalised.
The current framework does so – brutally. It actively favours supermarkets over pubs; online retailers and distribution warehouses over high-street operators; and passive consumption over social, place-based businesses. The result is predictable: suppressed growth, collapsing margins, lost jobs, failed businesses and diminished investment appetite.
These policies are not about growth. They actually cripple growth. From my point of view, what the sector needs now is to move away from the language of bailouts and emergency support and instead argue for a set of policies that unlock growth, employment and that encourage investment and reward success. This is how an economy thrives.
The unions have to get on board as well, because the government that they support is killing growth, killing jobs and killing off employers, and it’s killing off their members as well. I do not understand why they are so silent. Done properly, I suspect a fair playing ground would actually increase the Treasury’s take.
So, what does the sector need?
Growth is not achieved by borrowing billions to fund infrastructure projects where the profits flow back to non-UK companies and their non-UK pension fund shareholders. Growth is achieved by creating a fair playing field where UK business owners are rewarded for taking risks, employing people and, in the case of the hospitality sector, bringing joy to the population. What about the following?
Solve the horrendous inequality delivered by the business rates system. Open this problem up for consultation. Consider a turnover based tax or ones based on the value of the land, not the building, or soften the tax on bricks and mortar businesses by having an online sales/digital services tax.
Cut VAT to 10% across the entire hospitality and tourism sector. What the government loses in VAT will be recouped in PAYE, national insurance contributions etc. This remains the single most effective lever available. It would immediately improve viability, stimulate demand, encourage investment and allow operators to reinvest in people, premises and innovation. The international evidence is clear: lower VAT drives higher overall tax receipts through growth.
While I like the changes to EIS in the 2025 autumn statement, why not allow employees to invest in their own companies and qualify for EIS as well. Why should investors only qualify for this amazing relief? This would encourage share ownership, redistribute wealth, encourage retention rates and allow more employees to participate in the equity upside that their investment would deliver.
Furthermore, why not allow EIS to apply to debt for equity swaps, so businesses can attract equity investment to refinance out covid-19 debt as well as the enormous mountain of private equity loan notes and payment-in-kind notes now dragging great businesses down to liberate businesses from crippling debt piles?
Why not rethink the minimum wage framework for 16 to 21-year-olds. The new laws are having the opposite effect, as anecdotal evidence suggests the sector has been forced to turn its back on younger workers. I am sorry, but a 16 to 20-year-old worker cannot be worth the same as an experienced 25-year-old. I know, I worked in restaurants my entire student life.
In addition, why not allow hospitality to get young people off benefits by creating an opening under which any young person on benefits who starts working in hospitality gets to keep 20% of their benefits, plus earn the national minimum wage for, say, six months, as they transition into full-time work and a career. This is designed to allow young people to come to understand the value of a good day’s work, the camaraderie that working in hospitality delivers and the career prospects that the sector delivers.
We also need to create a Ministry of Hospitality. At present, the government manages the hospitality sector primarily through the Department for Business and Trade (DBT) and the Department for Culture, Media and Sport (DCMS). There is a dedicated Hospitality Sector Council, co-chaired by a junior minister and industry leaders.
However, coverage of the sector is scattered across multiple government departments – Treasury, DBT, Home Office, Department for Work and Pensions, Department for the Environment, Food and Rural Affairs, DCMS – often overseen by junior ministers with little interest, expertise or incentive to engage meaningfully with the sector. This fragmented approach guarantees misunderstanding, contradictory policy and regulatory overload, and a fundamental lack of understanding of the business and an ability for different departments to shift the blame and avoid responsibility.
A single Department of Hospitality would bring coherence, accountability and expertise. It would recognise hospitality as the strategic national asset it is, rather than treating it as an administrative inconvenience. Why not select a cabinet minister from the industry, place a sector leader in the House of Lords, appoint them as the minister and then let them explain our business model to government and ensure that the sector is protected, not taxed into liquidation?
I could think of another 20 ideas that would help to make the sector more attractive for investment, for employers, for entrepreneurs and the like, but for the love of all things sensible, the government needs to restore Entrepreneurs’ Relief (now BADR) to £10m. If we want founders to take risks, build businesses and reinvest their capital back into the sector, there has to be a meaningful reward for success.
Hospitality entrepreneurs are not asset-strippers; they are long-term value creators, and they deserve a huge carrot as their lives, houses and family futures are all linked to the success of their businesses, and the upside has been diminished to the point where its actually not worth starting out in the first place.
The goal should not be to preserve every struggling business, but to ensure that good ideas, well-run companies and ambitious founders are not being crushed by a system stacked against them. If you take the risk, you should get the cake and eat it.
Reclaiming the high street
Finally, there is a wider social prize at stake. Across Britain, high streets are increasingly dominated by uses that do little to build community or create long-term value. Hospitality, by contrast, brings people together. Coffee shops, bakeries, pubs, restaurants, bars, market halls and casual eateries animate places, create social glue and spread joy.
If we are serious about revitalising town centres, hospitality must be central to that vision. The political door is now open. Hospitality has been elevated from a lobbying concern to an election issue. The next step is for the sector to speak with confidence, clarity and unity about what it actually needs.
Not rescue. Not sympathy. But a fair chance to grow, employ, invest and thrive. Why shouldn’t we ask for that? It’s time to circle the wagons, UKHospitality and continue the fabulous work that you do – but now you have to get political, as Farage’s statement has opened that door. Get organised and get political.
David Roberts is corporate partner and head of leisure at international law firm CMS. This article first appeared in Propel Premium, which is sent to Premium subscribers every Friday. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.
A sweet proposition by Glynn Davis
While the big guns of quick service restaurants (QSR) fight it out to attract younger customers who have found it increasingly hard to stomach the big brands’ inflation-busting price rises over recent years, Generation Zs and millennials seem to have less aversion to splashing out on brightly-coloured drinks.
Blank Street Coffee has found itself the darling of the younger grouping who are more than happy to cram into its small units while they queue for its primed-for-camera matcha drinks at £4 to £5 a pop. Even these are relatively tame creations compared with what we have been seeing across the Atlantic, where sugar-loaded, bright concoctions are proving a massive draw at the US coffee brands.
They are accounting for an increasingly large percentage of sales and pushing coffee aside in many cases. Despite Starbucks peddling the narrative around its coffee credentials, the reality is that 60% of its sales are now derived from cold drinks. Many of these are shakes and other non-coffee creations that have helped propel Generation Z and millennials to account for 50% of its customer base. The after-school Starbucks visit by youngsters – armed with parent-funded prepaid gift cards – is a serious US phenomenon.
Arguably, the king of this growing market for soft drinks aimed at youngsters is Dutch Bros Coffee, which has built a chain of 1,100 sites in the US and has plans to grow to at least 2,000 by 2029. It has traditionally focused only on drive-thru sites, but in November last year, it opened its first drink-in location in Los Angeles, and it has been its top-performing store since opening its doors.
The range covers coffee-based drinks, energy drinks, tea, lemonade and smoothies, but the vast majority of the beverages it sells, including the coffee-based variety, are described as “flavour-forward and customised”. The names of its multi-coloured creations include Poppin’ Boba Fire Lizard Rebel, Cotton Candy Shake and Dinosaur Egg Rebel. And they are tooth-achingly sweet – you are lucky to get away with less than 100g of sugar in each of its offerings.
These drinks are not only appealing to sweet-toothed youngsters but are eye-catching and social media-friendly. They also come with equally sweet margins. Needless to say, this has not gone unnoticed by the QSR giants, who are not going to sit back and miss out on grabbing a piece of the action. Chris Kempczinski, chief executive of McDonald’s, has stated: “It’s a really large market opportunity. It’s growing, and it’s more profitable than food.”
This led to the trial run of nine beverage-led McDonald’s cafés, named CosMc’s, in late 2023 and although the plug was pulled on them after only 18 months, the company has been slowly rolling out its learnings into its core restaurants. This has seen an enhanced drinks offering being introduced into stores that cover the bases of iced and cold coffee, fruit juice, soft drink blends and energy drinks.
It is a similar story at KFC, where the company, in a world-first, opened a drinks-led brand called Kwench, with dedicated space on the first floor of its Liverpool city centre restaurant, in November. The range encompasses lemonade, bubble tea, milkshakes and various sparkling options. There are plenty of youth-friendly names in the mix, such as Chocolate Krunch Shake and Watermelon Poppin’ Refresher.
Some of these drinks found their way on to the menu boards at regular KFC outlets on a trial basis, and following strong uptake, a plan was put in place at the start of this year to roll-out 11 made-to-order beverages, selling at £1.99-upwards, across all KFC outlets during 2026.
There is a realisation across the major QSR brands that the soda fountain-type proposition encompassing just the big global soft drinks brands is no longer good enough. The coffee chains have shown what can be achieved from selling high-margin, sugar-heavy concoctions to the younger end of the market. Who knows – they might event stay for a Big Mac or some fried chicken while they are slurping down a Cherry Boba Refresher. Maybe the new secret sauce of QSR is drinks.
Glynn Davis is a leading commentator on retail trends
Last orders: waking up to pub wakes by Phil Mellows
There seems to be a lot of death about lately. It’s my age, of course. When I was young, hardly anyone died, apart from the occasional aged relative or American politician in dramatic circumstances. Now it’s my own generation getting it, the old geezer with the scythe picking off our herd one by one and getting closer.
The beer writing community has been especially badly hit of late – although that again must be just my peculiar perspective, as I’ve got to know a lot of them. Earlier this week, we lost Ted Bruning, who I worked with in the 1980s and who went on to edit the Campaign for Real Ale’s newspaper, What’s Brewing, and write countless books on pubs and drinks, often deploying his deep knowledge of history – which also came in useful on our pub quiz team.
Anyway, it makes you think, and it struck me that in my four decades of writing about pubs from, you’d imagine, every possible angle, I’ve never done anything on wakes.
For a long while now, I’ve noticed that wakes can be a very important part of a community pub’s business. When you visit pubs a lot during the day, you sometimes stumble upon them – a large jumble of people of all ages, not often in each other’s company, rotating around a buffet. Even when they’re not all dressed in black, which they aren’t always these days, you can tell what they’re here for.
Yet publicans rarely mention these events. There is reticence, of course, in talking about such things – a respect for private matters. But the bereaved have, in booking an area in a pub, or just turning up, chosen a public space. And I reckon this is significant.
We have, historically, dealt with death in a peculiar way in the west. From the 19th century, the journey to the grave became increasingly professionalised and handled by specialists. The people closest to the deceased in life were suddenly pushed aside and, in many cases, required to perform no more than a walk-on part at the funeral.
I remember the ceremony for my maternal grandmother many years ago. The vicar took complete charge, delivering the eulogy himself and sounding like he’d taken the words off the shelf; they could have applied to anyone.
I was in tears, not of grief, but of anger. He wasn’t talking about my grandmother. He had thrown away the opportunity to capture her unique life; to create a lasting memory.
Things have changed a lot since then, I think. Families and friends have striven to take back control; to speak themselves of the person they knew best; to tell the stories that make their life meaningful and purposeful.
I’m one of those strange people who enjoy wandering around old graveyards, reading the inscriptions on the stones, and from those scant lines, imagining a richly eventful biography. Beyond the funeral service, the wake – the after-party if you like – is a collective way of doing that creative work; a chance for people to tell their tales, trigger memories and write the story of someone more resiliently than words engraved on a stone.
And pubs are a good place to do that, as people intuitively understand. David Jesudason has written lately about the part pubs play in mourning without really mentioning wakes, which are the more formal aspect of that. More formal, but not too formal.
The bereaved are more frequently choosing pubs to “go back to” because they offer a relaxed, undemanding space that encourages people to mingle and talk; a space that is part of the normal, chaotic living world we need to “go back to” to make sense of a death.
It also suggests that pubs are implicitly trusted in this important social role. Even when they don’t go to the pub much, people want the pub to be there when they need it. Which doesn’t make for much of a business model, of course.
So, we don’t like to mention it, but pubs must make the most of wakes in these trying times – getting in a good crowd at a quiet time (some will open specially), laying on a buffet and oiling the conversation by selling lots of alcohol.
And there is a longer-term benefit in further bonding that pub with its local community and reminding those who only ever go to pubs for wakes how great they can be. Perhaps they might even plant the germ of an epiphany that you don’t have to wait for someone to die before they go to the pub again.
Phil Mellows is a leading industry commentator