Bars and restaurants struggling to survive ‘anti-business’ Budget

A city bar owner has warned of a dystopian future where only big chain pubs and restaurants survive, thanks to Rachel Reeves’ crippling Autumn Budget and National Insurance hikes.

Mark Wrigley, 61, who runs Manchester’s iconic Atlas Bar, says independent small businesses like his will be ‘destroyed’ by the financial changes.

It was a difficult budget for the hospitality sector with a large part of the new tax burden falling on the shoulders of a sector that has not had a break after Covid, lockdowns and soaring record inflation.

The Chancellor announced a rise in employers’ national insurance contributions (NICs), a lowering of the threshold for when those NICs start to be paid, rises in the minimum wage on top of a cut in business rates support.

Shattered Mr Wrigley told the Daily Express: “It’s a tax on jobs and it will lead to wholesale pub closures. It’s beyond painful- and there’s no sense of any light at the end of the tunnel.

“Unless the National Insurances moves are reversed and there’s a cut in VAT only huge companies like Wetherspoons will be left. They will be able to just sit back, watch us go under and pick up market share.”

Mark took over Atlas with his wife Elaine in 2012. The smart café and speciality gin bar – boasting 570 different types at the last count – sits under the railway arches at the end of the city’s main Deansgate thoroughfare.

It attracts professionals, young and old, from 10am – for breakfast and brunch – through to nearly midnight.

Improving the property and building a customer base has been a labour of love for the couple, whose four children have all worked there.

Atlas Bar now has a turnover of £1.5m and employs 27 people, both full and part-time, on £1 above minimum wage.

But Mark watched Rachel Reeves reveal her Autumn Budget with mounting dismay. It will pile at least £28,000 a year onto his cost base – in higher wages, business rates and employers’ National Insurance contributions alone.

He was planning to extend opening hours and take on two more staff. Now he faces losing two and abolishing four-day week working.

The “modest salary” he was taking out of this year’s £48,000 net profit has practically disappeared.

He told us: “I’m not getting anything now. I’m just doing charity work. I’m effectively a tax collector for the government. If it weren’t for my family I’d consider walking away.”

When MPs cheered the penny off a pint announcement, he was shouting at the TV screen.

He fumed: “That showed me they have no idea. I sold more than 100,000 pints of beer last year.

“I’ve calculated I’d need to increase by around 30p a pint to recover the money given to Government. But we then need to add VAT on top. So that’s getting close to 40p on a pint.

“All the mood music ahead of the Budget was that it would be about growth. I was shocked when I heard the actual Budget. They’re getting away with murder.

“We all want better schools and hospitals, but this is stealing from small businesses.

“The government insists small businesses won’t be affected, but they define them as firms with no more than four employees who are on the minimum wage. I don’t know one pub or restaurant in the UK that fits that bill.”

Mark’s business rates – currently at a post-Covid 75 per cent reduction – will rise by £12,000 in April when the rate reduction drops to 40 per cent.

His NI bill will go up by £16,500 – thanks to a 1.2 per cent rise in the rate and the change in the level at which it kicks in (now £5,000 instead £9,100). A third of his team were below the threshold. Now none of them are.

He has 18 months left to run on repaying his £100K Covid loan –much of which was used to repair the building after months of being shut down during the pandemic.

His seven-year energy fix is about to come to an end sending fuel bills soaring to boot and the cost of raw materials has also rocketed. A full English breakfast that used to retail at £8.50 now costs £14.50 but brings in less profit.

Mark also points to VAT which he says is “crippling hospitality”, explaining: “We buy eggs, bacon and sausages, then we heat them up and the Government takes 20 per cent of our hard work.”

The fact that the financial hit comes alongside improved employment rights for staff only adds to his problems.

Dealing with poor performers is already a challenge – and will make Atlas ‘more cautious’ about recruitment. The stricter rules around zero-hours contracts mean he will also have more admin to contend with.

Mark went on: “I never use zero hour contracts anyway but in the past we’ve been able to be flexible with staff who wanted to change their hours…. they may be students and have a dissertation to write.

“Now I will have to have everything in writing or risk litigation.”

Mark has written several letters to his local MP Lisa Nandy, and to Sir Keir Starmer, eager to explain what the hospitality industry needs right now. He has not had one reply.

He told us: “One thing that would breathe oxygen back into business for us would be to reduce VAT and put the NI level back to £9,100. They should also leave business rate relief at 75 per cent until the whole system is reformed.

“I really hope Labour rethink this. I’m not going to attack the government for making any U-turns if those U-turns save businesses like ours.”

Like the Atlas of Greek mythology, Mark feels like he carries the weight of the world on his shoulders. “At the moment”, he said. “I’m just trying to find a way through.”