Hospitality bosses warn staff crisis and rising costs hitting hard
‘If Le Gavroche can’t open for lunch, then we really are in the s***’: Hospitality bosses warn staffing crisis and rising costs have left them struggling to stay open as Rishi Sunak prepares to unveil Budget
- Hospitality heads say they have been hit hard by the pandemic and shortages
- Many are hoping Chancellor Rishi Sunak serves up ingredients for recovery
- It comes as restaurants say they are short of staff to serve customers
- And costs of some products post-Brexit have created challenging conditions
Hospitality and restaurant bosses are holding their breath for Rishi Sunak’s Budget today in hope he delivers something to help prop up their industry.
All are facing a shortage of staff qualified to serve customers keen to spend their money after a year and a half in on and off lockdowns.
And complications of Brexit mean restaurants are reporting being unable to get supplies through customs fast enough.
Next year National Insurance and corporation tax will rise, spelling more costs for employers and workers in the sector.
And the pandemic’s VAT cuts and business-rates holidays are also ending, signalling tough times ahead.
Paul Askew chef-patron at the 48-seat Art School restaurant in Liverpool – which offers a £164 a head tasting menu with wine – said many were feeling frustrations.
He cited the famous Le Gavroche in London, which has recently had to stop serving lunch.
Mr Askew told the Financial Times: ‘I’ve never put out so many fires in all my life.
‘We need something from this budget. I mean, if Le Gavroche can’t open for lunch, then we really are in the s***.
Paul Askew chef-patron at Liverpool’s 48-seat Art School restaurant is hoping for Budget help
Chancellor Rishi Sunak posing here in a restaurant last year to promote Eat Out to Help Out
The famous Le Gavroche in London has recently had to stop serving lunch over staff shortage
‘The tragedy is that we’ve got all the demand we can handle. Yet just at the time when we need to restore our cash flows, it’s like we’re handcuffed.’
He added his main problems were staff shortages as well as ingredients that had gone up in price and problems at customs.
The head of the Food and Drink Federation Ian Wright told the Commons Business Committee said prices were rocketing.
He said: ‘In hospitality, which is a precursor of retail, inflation is running somewhere between 14 and 18%. That is terrifying.
‘I think I’m probably the oldest person in the room. I was at university in 1977 – I remember inflation going to 27% under the Callaghan government.
‘And I remember the lady going round Sainsbury’s I think with stickers twice in the same hour to change the prices again and again.
In the Budget today, Rishi Sunak will declare Britain is ready to enter a ‘new age of optimism’ and a ‘post-Covid’ economy. Pictured with chief secretary Simon Clarke in the Treasury
The headline CPI rate of inflation was 3.1 per cent in September, down slightly from the 3.2 per cent recorded in August. However, the Bank of England expects it to top 4 per cent in the coming months
The government borrowed another £21.8billion in September, but so far this year borrowing is well over £30billion less than the OBR had expected due to the strong Covid recovery
Energy bills ‘to rise £100 next year’ fuel boss has already warned
Energy bills will shoot up by at least £100 next year – or possibly £200 – because of the failure of suppliers, the boss of British Gas owner Centrica yesterday warned.
A total of 16 energy suppliers have gone bust so far this year because of soaring wholesale gas prices. It has been predicted as many as 20 more will fail in the next few weeks.
The price cap on tariffs means that energy companies are paying more for gas and electricity than what they are allowed to charge customers.
Centrica chief executive Chris O’Shea told the House of Lords yesterday that the shortfall would cost ‘every single home in the UK’ £100.
He added: ‘It’s not unreasonable to expect that to double in the next few weeks…’
‘We really cannot go back to that. It took us 15 years to recover from that. And it’s terrifying for us and everybody who is suffering.
‘If the prime minister is, as I know he is, serious about levelling up, inflation is a bigger scourge than almost anything else, because it discriminates against the poor.’
Rishi Sunak is expected today to vow to create a ‘new age of optimism’ after Covid as he is handed Budget firepower with growth forecasts set to be nearly doubled.
The Chancellor has a bit more money to deploy due to the strong bounceback from the pandemic – with the independent Office for Budget Responsibility expected to say UK plc will grow by 7 per cent this year instead of the 4 per cent it pencilled in in March.
The ferocity of the global recovery has sparked materials and labour shortages, causing inflation to surge and posing other serious headaches for the government.
But as a result borrowing so far this year is well over £30billion below previous estimates, and the long-term damage to the British economy could be less than originally feared.
Rumours are swirling that Mr Sunak will deploy some of the headroom to ease the pressures on families and businesses from raging inflation and supply chain chaos.
He has already declared that the minimum wage will be hiked, and the public sector pay freeze is being axed.
Mr Sunak was seen poring over his Budget plans in the photographs issued by the Treasury in glossy pictures his department released of him
Diners at outside tables of a restaurant in the chinatown area of Soho in London
BUDGET 2021: WHAT WE ALREADY KNOW RISHI WILL ‘REVEAL’ TODAY
The Government has already announced spending worth more than £30billion which Rishi Sunak will confirm at the Budget later today.
- The national minimum wage will increase from £8.91 to £9.50 from April next year.
- An extra £6billion will be given to the NHS to pay for new equipment and new facilities to clear the Covid backlog.
- Brownfield sites covering the equivalent of 2,000 football pitches could be turned into plots for housing as part of a £1.8billion injection.
- A £2.6billion pot of funding will be set up to help children with special educational needs and disabilities.
- Levelling up transport outside of London will benefit to the tune of nearly £7billion, paying for a range of projects, including tram improvements.
- The Department of Health and Social Care will receive £5billion over the next three years to fund research and development in areas such as genome sequencing and tackling health inequalities.
- A cash injection of £3billion will be given to both post-16 education but also to adults later in life.
- £850million will be spent over three years to ‘breathe life’ back into cultural hotspots like London’s V&A museum, Tate Liverpool and the Imperial War Museum in Duxford.
- Ageing Border Force vessels will be replaced by new cutters as part of a £700million investment to improve the safety of Britain’s borders.
There is speculation of a boost to universal credit when he unveils the full fiscal package this afternoon, while alcohol duty could be cut to help pubs.
However, the Chancellor has also stressed the need to balance the books after the £400billion cost of the pandemic, with Tories raising alarm about the massive £2.2trillion debt and the looming threat of inflation driving up interest rates.
Mr Sunak will hail his Budget as ushering in a ‘new economy’ after the pandemic as he confirms billions of pounds for the NHS and wage rises for millions of workers.
The Treasury has pledged green investment and policies to take advantage of post-Brexit freedoms and has touted nearly £7billion of new funding for local transport.
Mr Sunak will also set out new fiscal rules, which are expected to include a commitment to stop borrowing to fund day-to-day spending within three years.
It is thought he will also require government debt, running at about 100 per cent of gross domestic product, to start falling by 2025.
Office for National Statistics figures showed last week government borrowing was far lower than forecast in the first half of the fiscal year.
The budget deficit was £108.1billion between April and September, almost 30 per cent below predictions. However, Mr Sunak will strike a note of caution about how servicing the debt could become much dearer if prices rise.
In March, he pointed out that a 1 per cent rise in interest rates and inflation would cost us over £25billion, adding: ‘Over the medium term, we cannot allow debt to keep rising, and, given how high our debt now is, we need to pay close attention to affordability.’
Ministers have been under huge pressure to reverse the decision to end the temporary £20-a-week uplift to Universal Credit, which was introduced during the pandemic.
Although the government has ruled out bowing to those demands – despite Andy Burnham suggesting this morning they would – many expect the Chancellor to make the benefit more generous.
That could mean cutting the taper rate – the proportion of handouts people lose once they are over their minimum work allowance – to 60p in the pound from 63p.
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