The 2026 Autumn Budget: what does hospitality want to see?
As hospitality faces another wave of closures and pressures ahead of the Autumn Budget, Staff Writer Peter Jennings asks chefs and restaurateurs across the industry what they want to see from the Chancellor.
By Peter Jennings
As many hospitality businesses struggle into the autumn of 2026, with over 1,800 closures in the second quarter of 2026 alone, a lot of chefs understandably feel abandoned by successive governments.
Rising costs, global instability and a feeling of not being listened to have left the industry disgruntled as it faces even more closures as the year goes on.
Chefs and restaurateurs from across the industry told us what they think of the state of the industry as we approach the Autumn Budget, and what they want to see to give hospitality some much-needed relief.
As 2,400 jobs were lost in hospitality in the first three months of 2026, it is important to ask what the government is going to do to protect jobs in one of Britain’s largest sectors of employment. Growing costs after the Russian invasion of Ukraine, as explained by Mandy Yin, formerly owner of Sambal Shiok in London, are pushing restaurants into a corner and forcing them to make the toughest decisions.
Mandy said: “Costs just kept mounting, increasing every single year.”
Mandy’s restaurant was a casualty of the growing costs, despite a hugely successful eight-year stint.
Closures are hitting every corner of the sector
Despite London’s higher rents and business costs, this is not exclusive to London either. Recently closed, the Bridge at Mountbatten wrote on Instagram: “Each time we steady the ship, we encounter another cost that is out of our control.”
They pointed to costs as a huge reason for their closure. This is just one example of the closures that have been inflicted on the struggling hospitality industry. Major hospitality employers have also been affected, as in April restaurant chain Whitbread, that owns Premier Inn, announced plans to exit its standalone restaurants, resulting in job reductions of 3,800 staff roles as part of £250million cost efficiency savings.
The vulnerability in all areas of the restaurant sector is clear, and these will continue to worsen without critical government support.
High churn has led to an unstable situation in hospitality. Between March and June 2026, around 20 licensed hospitality sites closed each day. However, according to NIQ’s Hospitality Market Monitor, new openings helped offset these closures, with the total number of licensed premises standing at just 0.2% below its level a year earlier.
This displays the instability, caused by the high costs mentioned by Mandy, alongside the continued demand for restaurant dining. The market for dining out is projected to grow in value in 2026, even despite the challenging conditions in the industry. This high churn can leave restaurants and pubs unsupported, as people will look at the announced growth figures, missing the bigger picture of unstable, financially insecure restaurants struggling with staff costs.
Volatile costs are squeezing margins further
While financial issues did not lead to the announcement of the closure of Box-E in Bristol, the owners discussed how tough the finances involved in ingredients are. Co-owner Tess Lidstone said “in particular the unpredictability of how much raw ingredients go up when there are destabilising world events” is one of the toughest issues facing restaurants currently.
Mandy mentioned the war in Ukraine, and Tess discussed Brexit and extreme weather as examples of destabilising factors. This instability puts further pressure on restaurant finances.
Tess said: “It’s unrealistic to either have menu items fluctuating based on the price of dairy, for example, or to put the prices up to truly reflect those increases, so instead restaurants often have to absorb them.”
With restaurants having to absorb those costs, it can be a brutal financial drain on businesses that are already facing increasing costs elsewhere.
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Gareth Fulford of Purslane in Cheltenham raised his concerns about the government’s attitude to hospitality support.
Gareth said: “It’s not that the government isn’t able, it’s not willing.”
When discussing financial support for hospitality businesses, and measures to protect the industry, this must be addressed by the Chancellor. However, Gareth is concerned the government won’t listen, and that it is just lip service being provided by the government to placate disgruntled business owners.
Gareth said “government doesn’t seem willing to listen to the sector,” and when they do, it’s “all just soundbites”. He is hopeful though, that there may be some change this time, adding: “Hopefully they’ll prove us wrong.”
The case for a VAT cut
The key measure desired by restaurant owners is a change to tax.
Mark Hughes, owner of Mercado Central, a Michelin Guide restaurant in Cambridge, said: “If we are taking on wages, costs of the food, if they tax us less, we can keep our menu prices at the same level.”
Mark called on the government to implement a fairer tax system, saying if VAT was put down to 10%, this would allow them to keep menu prices lower.
This echoes campaigns like Tom Kerridge’s VAT’s the Problem, which states: “VAT at 10% is fair for hospitality.” This is a figure that would bring Britain in line with Spain, France and Italy’s restaurant VAT rates, among many others.
On The Nut Tree Inn’s Instagram page, chef Michael North said of a VAT cut “it’s to give small businesses a fighting chance” and that the tax on earnings is a “huge, huge burden.”
Gareth, Mandy and Tess all echo this desire, showing just how important to the industry this cut would be.
This common thread among chefs is important to address, and government policy must listen to those calling for policies that can get targeted change through.
The VAT’s the Problem petition amassed over 400,000 signatures and was delivered in October to the government, indicating the strength of Tom Kerridge’s campaign. While the policy would cost around £12billion per year according to Tax Policy Associates, VAT’s the Problem argues that the cut would eventually pay for itself.
This shows the political difficulty in the Autumn Budget for this cut and raises the question of whether the Chancellor will deem it politically acceptable to accept the short-term costs of the campaign’s proposal, in anticipation of long-term benefits.
Hiring and training are under threat too
Hiring and labour costs are also a huge issue that business owners feel must be addressed. Mark stressed his desire to hire young people but said he felt constrained by the high costs involved.
“I want to employ young people, but when wage costs are so high I think twice,” Mark said.
Gareth added “when there is a profit, you can reinvest in your business,” and that part of this was what he would want to invest in “creating the next generation of chefs.”
However, with labour costs at such a high rate compared to turnover, it is extremely difficult for restaurants, despite their willingness to do so, to hire and nurture young talent. This will have a long-lasting impact on hospitality beyond the cost burdens, as the failure to teach new chefs due to costs will hold British restaurants back in the future.
Is support really on the horizon for hospitality businesses?
While chefs fear the continued rising costs and much needs to be done to stem the tide of closing businesses, there is also cause for optimism.
Chefs are coming together behind a policy of a VAT cut and figures show plenty of businesses opening in place of closed ones. So, could this be something the government will not be able to ignore soon, and is it finally time for a budget to include some hope for hospitality?
We shall find out on October 28.
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