"This isn’t pleading. It’s economic sense," says Stonegate CEO

David McDowall, CEO of Stonegate Group, has shared a personal address on exactly what the 4,000-strong operator would like to see from the Budget on 26 November.

In a post that McDowall shared on LinkedIn, he talks about how he started his career in hospitality at 18 as a part-time bartender and how since then he has been on a journey filled with growth and opportunities.

He goes on to outline major requests he'd like to see delivered from chancellor Rachel Reeves later this month, which largely mirror those of the rest of the pub and bar industry.

"I am passionate about ensuring that others, especially young people finding their way in their early careers, have access to the same opportunities in the years ahead," he says.

"For our sector to thrive and continue to be a significant driver of growth, it is crucial that we receive the necessary fair treatment and support. The hospitality industry has the potential to be a powerful engine for economic development, and it is essential that we enable it to reach its full capability."

McDowall's post in full

As the CEO of a business that owns over 4,000 pubs, bars and venues – from beloved locals to late-night city haunts – I’ve never seen the sector under greater pressure. Since July 2024, Labour’s tax and regulatory changes have piled £3.4bn in new annual costs onto hospitality due to increases to the National Living Wage, employer National Insurance Contributions and a reduction in business rates relief, according to analysis by UKHospitality.

The real story though, is that we are failing to support a pillar of our economy that has the potential to be a real engine for growth, and to have a positive impact on job creation, and communities all over the UK, quickly. 

I’m often asked about exactly what we want from a chancellor ahead of a Budget. This year it feels more important than ever before. And I’m happy to set this out here.

These are simple, deliverable, material changes that will protect our sector and encourage growth. Ultimately the chancellor has to ask herself… does she want a thriving hospitality sector or not? It really is that binary. 

So, the chancellor has a choice: support growth or accelerate decline. Hospitality – and the 3.5m jobs tied to it – need three bold reversals.

• Reverse the Employer NICs Hike – Now 

The jump in employer National Insurance Contributions, combined with the threshold slashed to £5,000, costs our sector £1bn a year. This isn’t a tax on profits. It’s a tax on employing people. Every bar team member, every chef, every cleaner now carries a £1,200+ government surcharge. There are only so many shifts that can be cut, recruitment freezes, passing costs on to our customers, that we can take. Reverse this hike - let the industry create meaningful opportunities for young people and those returning to work.

• Deliver Genuine Business Rates Reform – Not Tinkering 

Lower business rates to revive high streets, by delivering the maximum discount for hospitality properties under £500,000 rateable value and applying no penalty charge to larger hospitality properties. Commitment brings certainty, something we desperately need - commitment to full reform in 2026 and commitment to freeze bills in the interim. Pubs are at the heart of communities across the country, yet they pay 10 times more in property tax per square foot than out-of-town supermarkets - the system is broken, outdated and anti-high street.

• Cut VAT – Britain Has Europe’s 2nd Highest Rate 

At 20%, hospitality in the UK pays the second-highest VAT rate in Europe – triple Germany’s reduced rate, quadruple Ireland’s. Our European neighbours cut VAT to save jobs during Covid. We increased it. A temporary cut to 12.5% (or better, a permanent 5% hospitality rate) would save pubs, bars, cafes and restaurants from closure, protect jobs and, even more relevant for the chancellor, boost Treasury revenue through growth. 

This isn’t special pleading. It’s economic sense. Lower VAT means more spending, more jobs, more tax take overall. Chancellor, you’ve said you want growth. Hospitality delivers it. But we’re being taxed harder than banks. Reverse NICs. Reform rates. Cut VAT. 

Do this, and Britain’s pubs will still be going strong in 2030 – pouring pints, hosting communities, giving young people their first job, and bringing people together up and down the length and breadth of the country.

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