President Fuller: Budget tax increases will drive hotel companies ‘to the wall’

The chairman of Fuller, Smith and Turner has warned that tax and national minimum wage changes announced in the Autumn Budget will force hospitality businesses to close.

Michael Turner warned that the “unintended consequences” of Rachel Reeves’s raid on employers will be to “drive up inflation, put pressure on wages and drive many businesses into failure”.

Last month, Reeves announced that employers’ national insurance rate will rise from 13.8 per cent to 15 per cent from next April, while the threshold will fall from £9,100 to £5,000.

The share prices of many major hotel companies have fallen significantly since the week before the budget, as investors have digested multi-billion-dollar tax increases.

Mitchell & Butlers, JD Wetherspoon and Marston’s have all seen their share prices fall since the autumn budget.

On Wednesday, Turner said: “The Chancellor’s recent budget gave me cause to reflect that, over the years, we have seen our wonderful industry plundered by an ever-increasing amount of tax – and once again, history has repeated”.

He added: “The changes to Employers’ National Insurance, which add to the cumulative impact of other wage and business rate increases, will cause particular pain, and have been triggered by the Chancellor’s ill-advised promise not to raise taxes on the individuals.

“The Chancellor’s actions are a direct attack on those labour-intensive industries that are the lifeblood of our economy, while leaving the city’s great institutions, which can afford to pay their bills, almost completely intact. part”.

Analysts at Peel Hunt said: “We expect the Budget to cost Fuller £3m in extra NICs for employers, plus around £1m of additional NMW rises in 2026. Our forecasts assume most of this will be ‘will move to customers next year.’

Turner’s comments came as Fuller’s published its latest half-year results.

The group said upcoming concerts by Coldplay and Oasis will help boost accommodation sales at its sites.

Fuller’s said major events like Taylor Swift’s recent concerts helped “boost sales” in recent months.

It said it planned to invest in a number of its hotels in the second half of the financial year “to ensure we continue to improve the quality of our accommodation”.

The group added: “Accommodation continues to perform well and we have invested in sites such as The Head of the River in Oxford to take advantage of the continued rise in international tourism.”

Fuller’s revealed a rise in revenue of 2.8 per cent in the 26 weeks ending September 26, from £188.8 million to £194.1 million, and an increase in adjusted pre-tax profit of 17 per cent. cent, from £14.5 million to £17.6 million. Comparable sales increased 5.2 percent.

Chief executive Simon Emeny said: “We are in excellent shape and, despite the new challenges presented by the Chancellor’s recent Budget, we remain positive and optimistic about the future.”

fuller actions fell 0.58 per cent or 4.00 pence to 680.00 pence on Wednesday.