Four of Britain’s best-known hospitality owners went on television on Thursday 28 May with a blunt message for ministers: cut VAT or risk pushing more restaurants and pubs deeper into the red. Among them was Ravneet Gill, the Junior Bake Off judge and co-founder of Gina in Chingford, who said the sector’s cost pressures are now squeezing the ability to hire and grow.
The panel on Two’s Newsnight brought together Simon Rogan, Tom Kerridge, Yotam Ottolenghi and Gill, all of whom said the industry is being hit from several directions at once. They pointed to VAT at 20%, rising energy bills and higher ingredient prices, with Kerridge saying the tax burden was leaving operators unable to breathe and reinvest.
Rogan, who runs the three-Michelin-starred L’Enclume in Cartmel, Cumbria, said his businesses had become a “pretty sorry existence” in recent years. He added that after 24 years in business, it had “never been more difficult”, and that he and his team were “just keeping our heads above water”. Kerridge, the chef-owner of the two-Michelin-starred Hand & Flowers in Marlow, Buckinghamshire, said his margins had been “completely eroded” and that some sites were running at around 100% cost, with one or two at about 115%.
Gill pressed the point from a different angle. She said profit should not be treated as a “dirty thing” because it is what allows restaurants to grow, regenerate their areas and take on more people. But she also said the recent rise in minimum wage has made it unaffordable for her to employ younger staff, even when parents walk into her high-street restaurant and ask whether their son can get his first job. “These are lovely 17- or 18-year-olds, and I would really like to,” she said, “but when I compare them to perhaps a 23-year-old and the pay is the same, I can’t afford to do it.”
The argument lands at a time when hospitality is already under pressure from the 2024 budget, which raised National Insurance Contributions and the National Living Wage. Gill’s comments also cut into a broader policy problem: a government-backed Young People and Work report warned of an “urgent national crisis” after finding that one in eight 16- to 24-year-olds are not in education, employment or training. Employers say they want to offer more entry-level jobs, but the numbers are pushing in the opposite direction.
What remains unanswered is whether ministers will act on the call for lower VAT or offer another form of relief instead. For now, the owners who appeared on Newsnight say the current mix of tax, wage and input costs is already forcing them to hold back on hiring — especially for the youngest workers who would normally be taking their first step into work.
