Over 1,100 UK hospitality venues have closed since Labour’s Budget, with the Conservatives blaming tax hikes and rising costs for crippling the already struggling sector. As far as national politics is concerned that may well be true, but it’s playing out in a desperate way on the UK’s high streets which are dying before their councillors and local MPs very faces. So, why are these irresponsible local politicians playing Thelma and Louise and driving local high streets off the cliff with a campaign to kick out the only industry looking to invest in their local economies? Here’s the national data and trends that tell us how dangerous their plans will be for UK plc.
Britain’s hospitality sector is facing what critics call a government-made crisis, with over 1,100 pubs, bars and restaurants shutting their doors since Labour’s Autumn Budget.
The Conservatives are pointing the finger squarely at Chancellor Rachel Reeves, accusing her of unleashing a tax assault that has left the industry buckling under soaring employment costs and red tape.
According to new data from CGA and AlixPartners, 1,122 hospitality venues closed between October 2024 and July 2025 – equating to two closures every single day. The industry, already weakened by the Covid-19 pandemic and rising inflation, now says Reeves’s fiscal policies are pushing it over the edge.
“Two hospitality venues closing every day is not just a statistic; it represents the hollowing out of our high streets and communities,” remarked Kate Nicholls, CEO of UKHospitality. “Independent businesses, the lifeblood of our sector, are being disproportionately crushed under the weight of unfair taxation and soaring employment costs.”
The closures span all areas of the sector, with 633 restaurants, 326 gastropubs, and more than 100 casual dining chains shutting in the last year alone.
Much of the blame is being placed on Reeves’s October Budget, which included a hike in employer National Insurance from 13.8 percent to 15 percent and a slashed threshold that means more small employers are paying NI on part-time staff. Combined with a 6.7 percent increase in the minimum wage, the hospitality sector has been hit with £3bn in additional costs.
“These staples of high streets and communities are hitting breaking point under the weight of hikes in rates, jobs taxes and employment costs,” commented Shadow Business Secretary Andrew Griffith. “If everyone in Whitehall worked a shift or two in hospitality this summer, they might understand this better.”
A government spokesperson defended the measures, stating: “We know the vital importance of hospitality which is why we are protecting pavement pints and al fresco dining, have cut alcohol duty on draught pints and are reforming business rates.”
But for business owners that have long been warning the government about the existential threat of rising costs, such reassurances ring hollow. The sector needs major surgery, not a band aid they say.
“We need urgent, decisive action to relieve the burden on a sector that should be a powerful engine for economic growth and job creation,” concluded Nicholls.
Time for progressive change
Peter Hannibal, Gambling Business Group
These latest figures are a worrying signal to the government. Our businesses need a careful rethink on tax, regulatory and licensing policies.
The UK high street is in a precarious position; two hospitality businesses falling every day is living proof of this. The government must work with industry to reverse these figures.
Our own sector is a perfect example. We are desperate to invest and revive the UK’s local economies and yet we face growing obstruction on planning; campaigns to stop operations reopening shuttered shops; crippling regulation and the prospect of five years of consultations for modernisation going backwards.
It is impossible to deliver growth, employment and tax revenues under these circumstances. And our sector is not alone facing these conditions. We need progressive change.
Compounding ripples
Allaster Gair, Bacta
The alarming rate at which hospitality venues are closing, averaging two businesses per day since the October Budget, is deeply concerning for adjacent leisure and family-entertainment sectors. These venues are key to sustaining foot traffic and customer flow to our member businesses. Support is urgently needed to protect not just restaurants and pubs, but also the amusement and leisure venues that rely on a thriving hospitality environment. If left unchecked, we may soon witness compounding ripples across the wider entertainment and leisure economy.”
