Chancellor MUST act to rescue leisure industry from brink of oblivion, urges boss of UKHospitality

Appeal: Kate Nicholls wants Jeremy Hunt to freeze business rates in Autumn Statement

With his Autumn Statement just days away, Kate Nicholls has a message for Chancellor Jeremy Hunt. As the voice of the hospitality industry, which employs 3.5 million people and pays £54 billion a year in tax, she is demanding urgent action on business rates.

Otherwise, she says, a wave of small companies will be forced to close next spring because they will not be able to pay their spiralling bills.

As chief executive of UKHospitality, which represents 700 firms in the sector, Nicholls is acutely aware of the toll the past few years has exacted.

The pandemic was followed by soaring energy bills, runaway inflation, a continued trend to work from home and rail strikes, which hit travel and socialising.

She fears that if Hunt doesn’t act now pubs, hotels and restaurants – which are still recovering from the impact of the pandemic – face another ‘cliff edge’.

Small businesses in the sector currently pay just 25 per cent of the hated levy. But in April, all business rates relief for the hospitality sector is due to end and in addition bills across the sector will leap by September’s rate of inflation – 6.7 per cent.

‘If the Chancellor does nothing that’s an extra £1 billion bill for the industry,’ she says. ‘Firms will trade through Christmas and then hand the keys back in January.’

Nicholls, 51, admits the Chancellor is in a bind. ‘It’s probably one of those times where you are lobbying more in hope than expectation. Like everybody else who is putting pressure on the Government, we are acutely aware of the tight set of circumstances we are facing with the public finances.

‘The logic of your arguments – no matter how compelling they are – runs up against that hard head of the Treasury about how much money is available.’ She is even less hopeful that VAT will be cut. During Covid, it was slashed from 20 per cent to as low as 5 per cent for the sector – a move that ‘saved many thousands of businesses’, she says.

‘It remains the most effective measure we’ve ever seen. We know it’s the quickest and easiest way to unlock investment, get the economy moving and it’s deflationary. It brings down prices.’

But at a cost of about £6 billion if the rate was pegged back to 12.5 per cent, it is also costly.

Nicholls insists the move would repay itself over time and she draws a comparison with the tourist tax, which The Mail on Sunday is calling on the Chancellor to scrap.

‘If you cut those taxes we know it stimulates growth and recovery,’ says Nicholls. ‘People will come out and eat and drink so it pays for itself. And we repay the Treasury many times over in employment taxes, duties and business rates.’

The problem, in her eyes, is Treasury short-termism. ‘They just look at the costs and income foregone,’ she says. ‘They don’t have the capability of building in an assessment of what you might gain if you cut taxes.’

As befits the boss of the Britain’s hospitality trade body, Nicholls likes to promote destinations. She hails from County Durham and does a very good job selling her home region.

‘It’s a beautiful part of the world – but nobody goes there,’ she enthuses. ‘There are completely deserted beaches. It’s a secret.’

Her two strongest role models were her mother, who was a teacher, and her grandmother, ‘an entrepreneur who ran a corner shop’.

Is that where she got her hospitality gene from? ‘Probably. The shop was like Arkwright’s Open All Hours, in a mining community.’

Her formative years came in the early 1980s during the miners’ strike. Durham was less of a battleground than other mining communities because most of its pits were already earmarked for closure.

But she recalls how ‘anybody who worked in the mines’ did not want their children to follow them.

There was ‘a strong sense of community and a strong work ethic’, she remembers. ‘Social mobility was a key thing.’

Nicholls, a grammar school girl, was the first in her family to go to university, reading English at Cambridge.

From there she went first to London, working as an MP’s researcher in the House of Commons, and was then employed by an MEP in the European Parliament, honing her lobbying skills.

She had a number of strategic adviser roles, including at Whitbread, before joining the Association of Licensed Multiple Retailers where she secured the top job in 2015.

When the ALMR merged with the British Hospitality Association to form UKHospitality three years later she became boss of the enlarged group. Then Covid hit.

‘Nothing can prepare you for that,’ she admits. ‘It was a good job going into it that I didn’t know how long it was going to last.’

As the face and voice of the stricken hospitality industry Nicholls did hundreds of media interviews – on top of innumerable meetings with policymakers, members and colleagues. You lose count,’ Nicholls recalls, but at the height of the pandemic she was doing up to 15 back-to-back interviews daily, starting at 5am and finishing at 11pm.

‘It was relentless – like a series of marathons interspersed with sprints.

‘It was an incredibly intense and extremely stressful time. I didn’t realise how brutal it was until I stopped.’

She found grappling at pace with the complexities of schemes like furlough ‘intellectually stimulating’ and discovered she was ‘a lot more resilient than I thought I was’.

Nicholls added: ‘I clearly thrive on adrenaline.’

Covid made her ‘wiser and stronger’, but she also admits ‘it was a humbling experience. ‘It puts everything in perspective, I guess.’

She remains a strong advocate for hospitality as a career path.

‘It is the ultimate meritocracy,’ she maintains. ‘You can start with no experience, no qualifications, and in less than two years you can be a manager.

‘I don’t think there’s any other industry that invests in young people to such an extent and gives them the opportunity to go all the way as rapidly as that.’