Financial markets and hospitality leaders warmly welcome new Labour Government.
Following Labour’s landslide election victory, the FTSE 100 opened this morning rising 0.4%, at the same time the more native focused FTSE 250 increased by 1.8%, its highest point since April 2022.
The election outcome also eases some of the UK’s recent political uncertainty, the result was already baked in by most city economists, but still saw small improvement for sterling against the US dollar, making it now the strongest performing currency against the US dollar so far this year.
The pound also made positive gains on the euro, reflecting not just the sense of hope for greater stability from the incoming Labour government but also the uncertainty around France’s political future which continues to weigh down the euro.
The feeling amongst City analysts prior to the result, of which they were confident, is that the clear Labour win would bring stability to British politics after years of turmoil. This helps the incoming Labour Government to flag the UK as once again being a ‘safe haven’ for global investors set against ongoing political instability in the US, France, and the wider eurozone.
But what does this change bring to the UK’s hospitality and catering industry’s outlook?
We spoke this morning with Robert Richardson FIH MI who said: “With a historic mandate, and a promise to prioritise growth, a new government is an opportunity for change. The Institute of Hospitality welcomes this, at a time when we are working tirelessly to achieve recognition through Chartered Status for the hard working, talented professionals that make up our sector.
“Our sector plays a crucial role in the economy, providing employment, driving innovation, and delivering exceptional experiences. It is only fitting that the professionals who contribute so significantly to our society are acknowledged and honoured through Chartered Status.
“Irrespective of your political views, having spoken to many of our members today, the world feels a lot more optimistic than it did 24 hours ago, and we look forward to making our case to the new government as to why our highly skilled profession deserves a Chartered Professional Body.”
We also received this from Michael Kill, CEO of NTIA, who welcomed the new Labour Government saying: “As CEO of the Night Time Industries Association (NTIA), I warmly welcome the new Labour Government. Your commitment to our sector, vital to the UK’s economy and culture, is appreciated. However, the real work begins now. Our industry faces serious challenges and needs urgent attention to recover from years of neglect through the cost of living crisis and the pandemic.
“The night time economy thrives on a dynamic young workforce and consumer base whose energy and creativity are indispensable. Their involvement is vital for our industry’s success and shaping future voters. We must foster their engagement, as a priority and address their needs to ensure a thriving and inclusive nightlife sector.
“Our sector must rebuild trust with the new government, after years of feeling misunderstood and undervalued, we must work towards changing the narrative around the value of the night time economy, secure stronger representation at all levels, and create a more integrated regulatory system. We must also address tax disparity, reform business rates, protect independent operators, and align VAT with European standards.
“Immediate attention is needed in several key areas. Firstly, we urge the new Government to appoint a dedicated Minister for the Night Time Economy. This role will ensure focused attention and strategic direction for our sector at the highest level of government. Additionally, establishing regional representatives will then also facilitate effective strategy, communication and coordination across regions.
“Independent businesses and culture have suffered heavily over the last four years. Rebuilding and protecting existing businesses, creating a foundation for the future, and funding grassroots spaces and cultural events are essential for recovery. Implementing a heritage protection scheme for venues and cultural spaces will go some way to ensuring the preservation of venues that are integral to our communities.
“It is crucial to quickly establish a strong working foundation to support the industry in creating safe, culturally enriched cities and towns across the UK.
“More importantly, we urge you to take time to listen and consult on policies impacting our sector, recognising our challenges and our true value in terms of the local economy, community shaping, and the impact on social, physical, and mental well-being.
“The new government has a considerable opportunity ahead, with the current majority, there is an opportunity for meaningful and transactional change. We need the new government to prioritise meaningful policy changes, strategic and targeted financial support, and collaborative efforts to shape the future of nightlife. This will ensure a sustainable and thriving future for night time industries.
“Together, we can create a robust and vibrant nightlife economy that benefits communities and drives economic growth. The NTIA stands ready to work with you to achieve these goals.”
Kate Nicholls, Chief Executive of UKHospitality, said: “Firstly, I’d like to congratulate Sir Keir Starmer and the Labour Party on its victory in the General Election.
“We look forward to working with the new Labour Government, which during the campaign has clearly recognised hospitality’s role serving Britain and creating places where people want to live, work and invest.
“We now need to see this followed up with action in the first 100 days. Delivering on manifesto commitments to replace business rates and reform the Apprenticeship Levy would be a clear sign that the Government backs hospitality as the central pillar of the everyday economy.
“Swiftly addressing business rates would fulfil a longstanding ask of the sector and avoid a cliff-edge in April, when current relief is set to end and rates are due to increase again.
“Hospitality, with its presence in every constituency, can act as a powerhouse for driving economic growth, creating new jobs and regenerating our towns and cities. I look forward to working in partnership with the new Government to help deliver its manifesto commitments and realise hospitality’s growth ambitions.”
Paul Askew, Chef Patron of The Art School in Liverpool told us: “I hope the incoming government realises the urgency of our predicament across the UK’s hospitality industry.
“The quickest way to breathe new life into hospitality is a drop in VAT in line with most of our European friends. Otherwise, there’s no magic wand to bring down food inflation or help with the other myriad challenges which have not gone away – tax burdens, supply chain, recruiting staff from Europe, PAYE, debts from the pandemic. It’s impossible to pass all of these increased operating costs on to customers who themselves have been relentlessly squeezed for the last three years with the cost of living crisis and still now it’s an incredibly tough situation.
“If you showed an accountant how the hospitality industry is currently set up they would say it is doomed to fail. And still weekly operators are shutting their doors for good. It’s no way to run a business and we need an entire recalibration to help those that remain to flourish. The UK has many pressing issues to tackle and solve when the new government begins so I implore those at the top to help the hospitality industry with a VAT reduction as soon as possible.”
There is much euphoria today as the new UK political dawn opens up the possibilities from a Labour Government. But, as Keir Starmer, Rachel Reeves and others who will later today take control of UK politics and the economy will recognise, the enormity of the task ahead will take over from any emotions of joy, replaced with the urgent task of delivery.