This isn’t a business plan, this is a budget to save Reeves’ job

Sacha Lord, former adviser to Manchester mayor Andy Burnham, is unapologetic about calling Labor “the party of business and growth”

On June 13th last year, I stood in the impressive NOMA building in Manchester.

It was the launch of the Labor Party manifesto. The place was filled with energy, excitement and hope. The full shadow cabinet was there, every Labor Mayor, every Labor MP and every journalist who graced our TVs and airways.

Rachel Reeves stood up and promised the room “a pro-growth, pro-business Labor government”. After a decade and a half of chaos, mismanagement and economic stagnation, it feels like the new government will be the knight in shining armor that my sector, namely hospitality, so desperately needs.

I listened to his speech attentively and left feeling refreshed. As I sat in the car, ready to go home, I tweeted that it was “an orgy of business and growth.”

Millions of people agreed, took the Chancellor at his word, and voted accordingly.

This is a tweet I really regret that I keep sending. Reeves’ actions in government cannot be separated from the false promises he made that day. As a result, trust in politics is now at its lowest point, including after Partygate, when Downing Street became the most fined street in England during lockdown.

We need a new way of doing politics, where politicians are less tribal and take precedence over politics. This is happening a lot in Greater Manchester, where our leaders, from across parties, are working together. The result? Our economic performance is now better than any other city region in England.

Just wrong

This week’s budget feels odd. This doesn’t feel like a plan to help save the country; this feels more like a campaign to save jobs in the Cabinet. That is wrong.

What we really need are policies that support business, recognize the importance of economic growth and support the sectors that make Britain what it is today.

Hospitality is the UK’s fifth largest sector and third largest employer. Since the last Budget debacle, we have lost more than 110,000 jobs. Many of these jobs have been taken from the younger generation. Pubs must be selling pints at an all-time high, averaging £6.50 in Manchester – I’ve even heard of £8 in London. But once you factor in all the fees, taxes and overheads, the average profit on a pint is just 12p. Currently, the alcohol rate on a pint is 20 times that of a pint in Germany. No wonder we lose a pub every day.

Trust in politics is at an all-time low, including after the party, when Downing Street became the most fined street in England during lockdown.

The recent announcement from the government, that pubs can stay open longer, shows how out of touch they are with the sector. Pubs can’t afford to stay open and pay staff any longer; especially after the disastrous National Insurance increase.

I’m not sure who they were involved with, but it didn’t work. My suggestion is that the government officially recognizes the Hospitality Institute by granting them Chartered Status, and appointing a Minister for Hospitality – someone who has experience working in the sector.

If the Chancellor listens and works with the sector, he will introduce sector-specific hospitality VAT rates, similar to most countries in Europe. He will reverse damaging National Insurance increases and finally reform Business Rates. Business Rates reform will take place as announced, but we are still waiting to see the parameters. I would venture to say that this will lower costs at small venues – and this is certainly welcome – but will be at the expense of larger venues, such as nightclubs.

My feeling is that hospitality will be pushed aside again. I have been in this industry for over 30 years and never knew the sector was so demoralized.

I’m sad to expect major closures in January. Operator is damaged. It’s not just their finances that are ruined, but also their mental health.

At least with no Budget, this will stop the endless leaks, which would only hinder any investment.

I will be watching the Budget closely, in the hope that politicians keep the promises they made to voters. No more tax increases. No need to come back again. I didn’t hold my breath.

Sacha Lord is the founder of The Warehouse Project/Parklife, former night economy advisor to the Mayor of Manchester, chairman of the NTIA and author of Tales From the Dancefloor