- Michael Turner claimed Budget will lead to higher inflation
The chair of Fuller, Smith and Turner has warned that tax and national minimum wage changes announced in the Autumn Budget will force the closure of hospitality businesses.
Michael Turner warned the ‘unintended consequences’ of Rachel Reeves’s raid on employers will be to ‘drive inflation higher, put pressure on wages, and will drive many businesses to the wall’.
Last month, Reeves announced that the 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.
Warning: Michael Turner, chair of Fuller’s, said NI changes would drive many hospitality businesses ‘to the wall’
Share prices in many major hospitality firms have fallen significantly since the week preceding the Budget, as investors have digested multi-million pound tax hikes.
Mitchell & Butlers, JD Wetherspoon and Marston’s have all seen their share price stumble 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 for an ever-increasing amount of tax – and once again, history has repeated itself.’
He added: ‘The changes to Employers’ National Insurance, coming on top of the cumulative impact of other wage and business rate increases, will cause particular pain, and has been brought about by the Chancellor’s inadvisable promise not to increase taxes on individuals.
‘The Chancellor’s actions are a direct attack on those labour-intensive industries that are the lifeblood of our economy, whilst leaving the large City institutions, that can afford to pay their share, almost completely untouched.’
Upbeat: Fuller’s said Coldplay and Oasis concerts will help drive accommodation sales
Analysts at Peel Hunt said: ‘We expect the Budget to cost Fuller’s £3million in additional employers’ NIC, in addition to c.£1million of extra NMW increases in 2026. Our forecasts assume that most of this passed on to customers next year.’
Turner’s comments came as Fuller’s published its latest half-year results.
The group said upcoming Coldplay and Oasis concerts will help buoy accommodation sales across its sites.
Fuller’s said major events like recent Taylor Swift concerts helped ‘drive sales’ in recent months.
It said it planned to invest in a number of its hotel sites in the second half of the financial year ‘to ensure we continue to advance the quality of our accommodation’.
The group added: ‘Accommodation continues to perform well, and we have invested in sites like The Head of the River in Oxford to build on the continued increase in international tourism.’
Fuller’s unveiled an increase in revenue of 2.8 per cent in the 26 weeks ending 26 September, from £188.8million to £194.1million, and an increase in adjusted profit before tax of 17 per cent, from £14.5million to £17.6million. Like-for-like sales rose 5.2 per cent.
Chief Executive, Simon Emeny, said: ‘We are in excellent shape, and despite the fresh challenges presented by the Chancellor’s recent budget, we remain positive and optimistic about the future.’
Fuller’s shares slipped 0.58 per cent or 4.00p to 680.00p on Wednesday.
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