Top chefs in business rate warning

Two of the North East’s top restaurateurs have issued an urgent plea for help from Rachel Reeves, amid fears that business rate hikes will lead to even more closures in the struggling hospitality sector, writes Local Democracy Reporter, Daniel Holland.

Kenny Atkinson and Cal Byerley, the chefs behind the Michelin-starred House of Tides in Newcastle and Pine in Northumberland, have warned of major job losses among the region’s restaurants, hotels, bars, and their supply chain unless the Government acts to bring down their tax bills.

2025 saw the demise of a raft of popular Tyneside venues like Earl of Pitt Street, Leila Lily’s, Horticulture, Prohibition, and Peace and Loaf, a trend that has continued into this year with recent news that popular late-night bar The Mushroom will be shutting its doors.

While ministers have confirmed an expected climbdown to soften the impact for pubs as a result of looming business rate rises, due to a combination of properties being revalued and the phasing out of Covid-era relief, industry leaders say that support must be extended to the wider hospitality sector.

Speaking to the Local Democracy Reporting Service on a visit to the North East last week, Ms Reeves said the Treasury understood that the rates uplifts were “too soon” for some businesses and suggested there could be support for the sector beyond just pubs.

Mr Byerley, chef-owner of the acclaimed restaurant in East Wallhouses, accused Labour of “attacking small hospitality businesses on an unprecedented scale”.

He and others have called for the Chancellor to slash the VAT rate on hospitality, which currently stands at 20% – compared to 10% in France and Spain, and 7% in Germany.

The top chef said: “Pubs, cafés and small restaurants are expected to face a 15 per cent rise in business rates this year, averaging £1,400 more per venue, with rates increasing by 76 per cent over three years – an extra £12,900 simply to open the doors and trade. The average hotel will see its business rates rise by £28,900 in 2026, with total increases of £205,200 over three years, a staggering 115 per cent rise. Where, exactly, is this money supposed to come from?”

Pine’s business rates have increased from £10,500 to £18,000-a-year and Mr Byerley, who runs the restaurant with wife Siân, compared the “managed decline” of the hospitality sector to the end of the North East’s mining industry.

He added: “Between the late 1970s and the early 1990s, the collapse of the mining industry in the North East resulted in around 125,000 direct job losses over roughly 12 years. Each mining job supported two to three others, meaning the real impact was closer to 300,000 lost livelihoods. That collapse created a decade-long regional depression, followed by long-term welfare dependence.

“Now consider what is coming. More than 2,000 hospitality businesses are predicted to close in the UK in 2026, including 963 restaurants, 574 hotels and 540 pubs. That equates to 55,000 to 60,000 direct job losses in a very short period of time. Apply the same employment multiplier and the true impact could reach 110,000 to 180,000 jobs, on top of the 100,000 already lost. This is not growth. This is managed decline.”

Mr Atkinson, who opened House of Tides on the Newcastle Quayside in 2014 and nearby Solstice in 2022, warned that many business owners in Tyneside’s hospitality sector are now “on their last legs”.

He said that the end to Covid-era business rate relief would add to further pressures resulting from higher energy and produce bills, minimum wage increases, and pension and National Insurance contributions.

Mr Atkinson, who said his restaurants’ utility bills have jumped from  £20,000 to £55,000 per year, called the level of VAT on hospitality  “so disproportionately wrong”.

He added: “Everyone goes to France or Spain or Greece and says how much cheaper the beer and food is – that is because the taxation on businesses in this country is just not in line with what it should be. It makes businesses unsustainable.

“The idea of going into business is to make a lifestyle for yourself, make a bit of money, and contribute back into the economy. But at the moment we are getting so much taken off us that businesses are finding they are only just able to pay their staff and the Government, and not ourselves. That is why you are seeing restaurants close, places like Hide or Peace and Loaf. Everybody is on their last legs at the moment.”

More than 130 senior hotel and holiday park bosses have also called on the Chancellor to broaden the expected support for pubs.

Asked if help would be extended to the wider sector, Ms Reeves told the LDRS during a visit to Darlington: “We will set out the details and we are working with UK Hospitality and the British Beer and Pub Association and others at the moment to work out what further support is needed. In the Budget I put just over £4 billion of support as the Covid support comes to an end, additional support to get us back to a more normal system of business rates.

“But I recognise that for some pubs and other businesses those increases in business rates are coming too soon, so we are working with the sector and will set out detailed plans.

“I think it is worth remembering what is happening here. During Covid the value of pubs particularly, more than any other part of the economy, their value collapsed and at the same time a lot of temporary support went in. Now that we are several years out of the pandemic the valuations of those properties have gone back up, which is good, but the temporary support cannot continue forever. What we need to do is make sure that it is not withdrawn at a rate which affects the viability of pubs and other businesses. We are working, at the budget we did put a lot of additional money in, but we recognise for some businesses there are particular problems we need to address.”