We grill some of the people Sunak should be listening to on furlough, tax breaks and the health of the hospitality industry
If you want to find out about the challenges faced by the beleaguered hospitality sector, everyone knows the best place to start is with a multi-millionaire chef with multiple TV shows and branding streams.
So when Rishi Sunak, Chancellor of the Exchequer and wannabe YouTuber, needed to know more about the devastation the last 12 months has wrought upon the industry, of course he Zoomed his mate Gordon for a heartwarming millionaire-to-millionaire chat.
It's felt like being in a really shit video game, where you don't know how to play it and the end of level boss is Boris Johnson
Ramsay leapt at the chance to promote his new TV show. This opportunism is the reason he is a self-made man - no marrying into billions for Gordon, unlike his interlocutor.
If you thought that this might be a serious chat about VAT and all that pesky stuff, you'd be mistaken. Instead, we had Rishi fan-girling about Gordon's 'ironmen’ events and Gordon assuring Rishi that ‘no one could have seen this coming’ (apart from all those scientific types, of course).
Hospitality Twitter erupted in outrage.
While it’s cathartic to poke a little fun at this oleaginous piece of content, there are important questions to be asked and answered. So, we assembled our own round table of Northern industry leaders to serve up a three-course meal of hard reality. This is the Zoom call Rishi should have had.
Chef-proprietors Mary-Ellen Mctague and Paul Porky Askew, no-nonsense butcher Lee Horsley-Frost, Tampopo founder David Fox, indie newcomer Cue Tran, publican Iain Hoskins, restaurant marketing guru Becky Wilkes and industry insider Thom Hetherington were kind enough to share their thoughts with us.
Chancellor Sunak, we hope you're feeling hungry…
Dare we ask, how are you?
David Fox: 'I'm pretty miserable. It’s a dark time for hospitality. The whole argument was that it would be data not dates and he's just put out a load of fucking dates.
"Rishi and Ramsay saying we've got some of the best support in the world. That's bullshit, France has got better support than the UK. Sorry. America has got better support for hospitality businesses.
"The furlough is not financial support. Furlough costs companies money because we have to pay pensions and National Insurance. Don't get me wrong, it's really appreciated but the notion that is stopping us going bust is bullshit"
Lee Horsley-Frost: "I don't care about Gordon Ramsay. He's got plenty of money just like Jamie Oliver. Jamie Oliver screwed all his suppliers and his staff. The company lost millions. He didn't lose any money and he's still on television. All his staff lost their jobs. He's got a nerve to even be on television and the same for Ramsay.
"When Gordon Ramsay comes on telly saying, 'I've lost £57 million'. He’s not. His company has. He hasn't personally. It's his suppliers that will lose out. I’ve got no worries at all about him. The only person I’m championing is the small independents on the high street in suburbs like Didsbury, Chorlton and Urmston.
"I don't think the general public's bothered about these arsehole celebrity chefs."
How have you adapted to lockdown and how challenging has it really been?
Fox: "It's been a nightmare. An absolute nightmare."
Thom Hetherington: "It's been virtually impossible. Not just because of the constraints themselves, which the industry has invested in and worked hard to support, but because of the appalling levels of communication and consultation from the government. There’s been constant chopping and changing, a lack of transparency and justification, and muddy thinking which often appears to have been made up on the fly. Scotch-egg gate is a perfect example."
Mary-Ellen McTague: "It's felt like being in a really shit video game, where you don't know how to play it and the end-of-level boss is Boris Johnson.
"It's felt at times completely bewildering, overwhelming and almost like you're being gaslighted. The number of times we were encouraged to open and then had to close again. All the expense and the stress of getting the business up and running and started again. It just takes so much time and energy and money. Having to close again suddenly several times, losing all that stock and income, all the admin time. You have to close the place down, you’ve not got customers coming in, you have to process the food, contact all the customers and rearrange or cancel bookings. All of that costs money that no one's accounting for. So honestly, it just felt attritional."
Paul Porky Askew: "Without doubt, it's the biggest challenge of my career - which is coming up to 40 years. The financial challenges, the human challenges of trying to keep the team together - that's always been my priority. Hospitality is a people business. If you don't have your team, you’ve got nothing. It's always been about holding the team together as much as we can.
"Unfortunately, we’ve lost international staff who've gone back home to Spain and France and Italy. I'm not sure they'll return because obviously they've got their own problems in their own countries, and then Brexit of course which we're still working our way through. The timing you couldn't script, could you?
"We're naturally creative and entrepreneurial. We've had to be. We started our own retail and online business. We'd dipped our toe in that a little bit just before lockdown but never really had the time to progress it properly. So of course all our efforts switched to that because it was the only revenue stream that we had. We repurposed the bar downstairs into a retail outlet - The Art School Cellars is now called the Emporium of Fine Food and Wine and people come and buy artisan cheeses, charcuterie, bottles of wine, breads, pastries, pies - you name it.
"That led into The Art School at-home boxes. Customers can come into the Emporium to pick up the boxes or use our door-to-door delivery service. As much as we can, we've translated what would happen in the dining room when you're sat in those chairs. The frustration is packaging everything up and putting it in a box. That drives me potty."
Cue Tran: "We've created lots of street food boxes which has really helped throughout lockdown but it's been challenging with the packaging as you can't guarantee the quality of the food once it leaves. That’s the hardest thing for me, I always want the food to be perfect for the customers."
What do you think of the Government's support for hospitality?
Fox: "Paltry. Eighty percent of any support is going to pay pensions and employers National Insurance which we’re obliged to pay for furloughed staff. That leaves 20% which is the square root of bugger all. There's rent, insurance, payroll costs, heat, light and power, maintenance contracts, property-related costs. You still need to get your extractor cleaned a certain amount of times, you still need your air-conditioning kits servicing.
"The balance of money that we then have isn't even touching the sides of what we need to pay. It costs me about 100 grand a month and I'm getting about 10 grand a month from the Government. I'm losing 90 grand a month for nine months. It doesn't take a fucking epidemiologist to work out what's going to happen."
Becky Wilkes: "We've seen businesses collapse and thousands of jobs lost. Emergency cash grants are not reaching the sides of the financial hole many businesses find themselves in. More than a million people working in hospitality are still on furlough and that percentage is only based on their House Pay, not Tronc Pay so a lot of people are only coming out with a third of their wage.
"It isn't just the financial side, it's the constant stop/start approach they've had when making decisions about our industry. It has been a huge factor in people struggling with mental health. "
Frost: "They've done their best but I think they could have supported the hospitality industry better. I don't think anyone else in the whole world has done what they've done with the furlough. If he'd opened it earlier and we'd had the second wave, they'd have been blamed for that. So they're being cautious. I know Sacha Lord is saying, "they could have done this, they could have done that". It's all very well for Sacha to say it. He's not got the responsibility of maybe another 50,000 deaths if they did reopen sooner."
Askew: "The employer contributions, PAYE and NI are virtually what it would be if [the staff] were working so you get a grant and then it goes out the door - plus some charges. Even if we weren't selling boxes and doing retail, we'd be losing money just standing still. The big problem is the rents haven't all been negotiated. I managed to get six months rent-free and had to renegotiate to add time at the end of the lease to try and keep everybody happy - which was just bonkers. Now, of course, that's run out and we've got another four months this year where we're paying for an empty building.
"The other absolutely horrendous problem which has still not been resolved - even though I think it's gone to the Supreme Court - is insurance companies. We've all, in good faith, taken out business interruption and infectious disease cover only to find out that the companies are fighting it and saying 'Oh no the wording is wrong, that's not us'. We've paid thousands and thousands over the years. I've never made a claim. Now when we need them, they run for the hills."
Hetherington: "There is much to be grateful for, not least furlough, the rates holiday, the VAT cut, and the lease forfeiture and debt enforcement moratoria. Many of these elements were fought for from day one by industry leaders such as Kate Nicholls and Jonathan Downey. But the sad fact is that if this isn't now extended to see operators through to normal summer trading it may all be for naught. It would be catastrophic for the whole country if a collapse of hospitality businesses and the resulting mass unemployment was merely delayed, rather than avoided entirely, for want of what is, in macroeconomic terms, a ha'porth of tar."
Hoskins: "It's been scattershot. The furlough has been very good. The operational stuff like VAT reduction should be in place to help come out of lockdown rather than during lockdown.
"It’s been broadly good and well-received. It was more decision-making and planning that was the problem. We all knew there was going to be a second wave. If you’d had the two-week circuit break in September, that would have meant everybody could have opened at Christmas. The whole Christmas thing was just a complete mess from start to finish. Mixed messages all the way. The approach has been schizophrenic really."
McTague: "Whilst I appreciate the furlough scheme - and would like to see it kept in place until we're able to be back up to 100 percent capacity, a lot of restaurants and cafes are in quite small buildings so our rateable value's really low. We're in the lowest bracket which means that we've only been able to access the lowest amount of grants available. It isn't enough to cover our outgoings. All industries are slightly different but for hospitality in particular, where so much of our purchases are food, it's not a level playing field. We're not the same as a manufacturing business or a publishing business. I'm really grateful for the furlough scheme. I'm glad all of the staff still have jobs. Obviously, it's hard to live off 80% of your wage, but I'm glad there's been some support."
What do you think the industry needs now?
Fox: "Proper financial support. Hospitality employs nearly 3 million people; a lot of whom the education system hasn't worked for. We provide a really important route to long-term employment and equip them with life skills they can use within hospitality or any other sector. Those people have been in limbo for a year."
Frost: "I would give them a big VAT cut. If you speak to any restaurateur or anyone in the catering industry, the biggest problem they've got is paying the VAT. I'm on the phone to them saying 'Can you pay my bill?' and they say 'I can't pay you this week, I've just paid the VAT'. If you could give them a lifeline, this would be the biggest: Cut VAT to 5% for 12 months.
"Corporation tax is at 19% and they're talking about putting it up to 23%. If they could leave it a couple of years before they put it up that would help as well. Let everyone recover."
Wilkes: "We need a clear path, with clear dates and no more U-turns or last-minute decisions. They need to listen to us before making decisions with no evidence or understanding of the repercussions. The 10pm curfew and substantial meal rule were beyond a joke. They also need to look at more financial support for wet-led pubs/music venues. Extend the reduced VAT and furlough but also include Tronc into furlough payments."
Hetherington: "Firstly, 'steady as she goes' regarding existing Government support. Based on their own roadmap this means extending the current measures until June as the earliest. Secondly, for the Government to step in regarding the situation between landlords and operators. In many cases, rent hasn't been paid for twelve months, and to move forward this financial log-jam needs to be broken in a fair and constructive way for all parties.
"Thirdly, a hidden issue is that many independent operators will have taken on significant personal debt to get through the pandemic. The mental and financial strain on them needs to be recognised. Charities like Hospitality Action do a wonderful job supporting hospitality professionals through desperate times, but they will be swamped. More provision for vulnerable individuals will be needed."
McTague: "All staff should be on flexible furlough. Whatever we aren't able to give them, they should be able to get back in furlough. We should be able to keep as many members of the team on full furlough as we need to until there aren't restrictions in place because with restrictions in place here. Because it's so tiny, we can't do anywhere near what we used to do."
Tran: "And of course people need to support local and small businesses to ensure that they can stay open."
In what ways will hospitality innovate this year?
Hetherington: "This is an industry of neophiles serving an audience of neophiles, it has always thrived on innovation and a hunger for the new and the novel, and the only constant is that this churn never changes.
"I think blended revenue models will remain the norm, and technology and sustainability will be rightfully at the heart of many businesses. A drop in rents and availability of sites will be a fertile breeding ground for the next generation of food and drink entrepreneurs. Ultimately I hope that the baby isn't thrown out with the bathwater - the fundamentals of good hospitality are timeless, and I think that's what we all really crave."
Tran: "I think we'll see a surge of independents as we saw a lot of people during lockdown start small businesses like cookies and doughnuts, which is really nice to see."
Fox: "Technology has been accelerated. The really important thing is you have the technology available for people to engage with if they wish. Ninety percent of people under the age of 30 would rather just pay the bill on the phone without the hassle of calling a waiter over.
"The bottom line is, whether it's at the back bar of the Britons Protection, or in Tampopo, or The Northern Quarter restaurant on date night, people will want that human interaction. We are social animals."
Whatever the result today, please allow us to get our ducks in a row before you start phoning/messaging to make a booking. We find out at the exact same time as you and will have lots of admin to do with our booking systems first. Please be kind and patient #Hospitality
— Becky Wilkes (@BeckyWilkesMCR) February 22, 2021
Wilkes: "In the past year, we’ve had to be reactive rather than proactive. Things haven't gone to plan and we’ve had to learn and adapt as we’ve gone on. In 2021, we’ll still feel very hesitant as we start to rebuild the damage of 2020.
"Places may continue to offer a delivery service as people still may feel vulnerable to go out or to travel to the city. All we can do is reassure our guests that we are a safe place and we are ready to help you celebrate those missed moments."
Hoskins: "The cook-at-home kits have been great innovations. I think people have got used to that. A lot of technical innovations, such as direct-to-table service, will be here to stay. The most important thing to happen will be embracing what makes hospitality great.
"We've got to give people a reason to come back out. Not giving them that level of service by just telling them to download an app as they come through the front door will not revive the industry. You've got to remind people why it's good to go out, why you should get together with friends, why you want to go out and hear music, have an incredible cocktail: something bespoke that you wouldn't make at home, try things you'd never have tried before - it's that sort of stuff which will be the difference
"Let's greet people at the door. Let's give them great table service. Technical innovations will have their place for sure but you thrive on having a USP - whether that be your service, products or place: that is how we get people back out again."
Hospitality team, assemble!
Becky Wilkes is Senior Sales and Marketing Manager of the North for D&D London (which includes 20 Stories amongst others) and PR Director of the Manchester Hospitality Network.
David Fox is the director of pan-Asian Tampopo, which began life in Manchester over 20 years ago and has since expanded into a national chain.
Lee Horsley-Frost, also known as Frosty Butcher, is the owner of Chorlton’s WH Frost Butcher, which has been in operation since 1890 and is supplier of steak to the stars as well as many of Manchester's restaurants.
Mary-Ellen McTague is the owner and chef at The Creameries. She launched Eat Well MCR at the beginning of the pandemic, initially as a way to feed frontline NHS staff, but has now also developed marketplace for independents to be able to sell their products and meal kits to a keen audience.
Thom Hetherington is CEO of Holden Media, which organises the Northern Restaurant and Bar Show, as well as a cheerleader for the hospitality industry.
Iain Hoskins is the owner of owner of the Ma Pub Group UK which includes MaBoyle's Alehouse and Eatery in Liverpool.
If you'd like to contribute to future articles like this and you work in any area of hospitality in the North, you can get in touch here.