Budget hopes as hospitality faces 'uphill battle'

6 hours ago

Tamsin MelvilleSouth West

Katie Warren, from the Cornwall Visitor Alliance, said continued taxation policies made it hard for businesses to keep afloat

BBC A youngish woman is looking at the camera and smiling - you can see her head and shoulders. She has brown, wavy shoulder length hair and brown eyes, she is wearing a white roll neck jumper pale pink lipstick and has freckles. She is in a room that is painted white and there is a small painting of two yachts on the wall. — Katie Warren, from the Cornwall Visitor Alliance, said continued taxation policies made it hard for businesses to keep afloat

Tourism and hospitality leaders have warned the government any further taxation or financial pressures in the upcoming Budget would "hinder growth".

Katie Warren, the chair of the Cornwall Visitors Alliance, said the sector was watching "with absolutely bated breath".

Many businesses in Devon and Cornwall have also called for the Chancellor John Healey to reverse last year's changes to National Insurance contributions.

Healey will deliver his first Budget on Wednesday, but has refused to rule out tax increases after acknowledging government borrowing costs are at "historic highs".

'Absolutely diabolical'

Warren has run a self-catering holiday let business in Falmouth, Cornwall, for 15 years, said: "We would like to see cuts to VAT, cuts to small business rates and a look back at the National Insurance contributions system."

A rise in employer's National Insurance was announced in Labour's first Budget in 2024 and took effect in April 2025.

Warren said it had been "absolutely diabolical for the sector" and "tens of thousands of jobs have been cut across the UK since the changes came in".

"Businesses have had to close because they could not meet those overheads along with the constant rise in operational costs," she added.

In Newquay, Cornwall, Chris Thomson is the owner and founder of 10 Over Surf Shop, that also hosts a café, barbers and marketing agency.

He said it was "tough" starting a small business and "it constantly feels like an uphill battle".

He said: "From our perspective on hospitality, it'd be amazing to see the VAT rate reduced.

"Simply because the highest cost for hospitality is staff wages and you can't reclaim VAT against that.

"So lowering the VAT rate to 10% would just give us a bit more margin to improve the business and invest in our team."

Chris Thomson is running a surf and lifestyle shop and says the government needs to listen to small businesses

A man is looking directly at the camera, he has blue eyes and is tanned with a brown short beard. He is wearing a grey cap and a black t-shirt. Behind him is a surfboard on a white wall and the word 'Wavelength', with magazines in a wooden rack. — Chris Thomson is running a surf and lifestyle shop and says the government needs to listen to small businesses

At the River Dart Country Park, near Ashburton in Devon, general manager Roger Sell said they employed about 100 staff depending on the season, with about 30% under the age of 18.

Sell, who is also chairman for the Devon Association of Tourist Attractions, said he wanted to see measures to encourage youth employment in the Budget.

"Employment in our sector is huge and we're in the customer service business, so we have to employ in the right way, and we have to do a lot of training with our staff.

"So anything that is putting a restriction on us employing, like the National Insurance contributions, is having a massive effect in the tourism sector," he said.

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