'More restaurants and bars could shut without help'

Restaurant and bar owners across Leeds have warned that businesses in the hospitality sector could close without more support from the government.

They told the BBC it had been a "difficult five years" but that Labour's recent Budget had made their situation more difficult.

Owners pointed to a rise in the national living wage and employer National Insurance contributions as a reason for increased pressures on their operating costs.

However, Chancellor Rachel Reeves said the government had extended business rates relief for a further year and committed to reforming the rates system, which would benefit hospitality businesses.

Ian Leigh, managing director at Chaophraya, a Thai restaurant with branches in Leeds, Scotland, Birmingham and Newcastle, described Labour's Budget as a "direct hit on growth".

Mr Leigh added: "With Brexit, Covid, energy bills and consumer sentiment it is a perfect endless storm. The sector takes pride in being resilient but we are almost expecting the next calamity."

He said the lowering of the National Insurance threshold in the Budget was a "tax on the number of people you employ, not a measure based on profits or any other business success" and said it would "hurt" his business.

He went on to explain that the Budget was already having a negative impact on his restaurant.

"The day after the Budget, we had a key meeting hoping to get some investment signed off to enable us to grow the business, open a couple more sites and employ more people.

"But the change in National Insurance was enough to spook our investors and they dropped out. They said it was a huge change and we'd have to change our business model."

James Ince opened Number 8 Cocktail Bar in Meanwood, Leeds, in November 2021 and has similar fears about the impact of the Budget on his bar.

He has seen his outgoings increase and the cost of beer, wine, gas and utilities rise and feared businesses would close without more support.

Mr Ince had hoped the Chancellor would offer a short-term cut to VAT for hospitality and leisure to boost the sector.

He added: "It is difficult to invest when all you can see is rising costs and the profits aren't the healthiest. It's a difficult position when you try and look to the future to see a pathway and there's not much to go on."

Among the casualties in Leeds has been rooftop bar Angelica & Crafthouse, which announced its closure this week due to "economic challenges".

On a recent visit to the city, Reeves said she was "not immune" to the challenges small businesses faced.

She said: "I didn't want the end of business rates relief to happen, so we have been able to extend the relief for a further year and we want to have permanent lower rates for smaller retail, hospitality and leisure businesses."

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