Celebrity chef Nick Nairn has warned the UK Government’s Budget will be “the nail in the coffin” for many businesses in the hospitality industry.
The Stirling-born owner of Nick’s at Port of Menteith said a hike in both National Insurance and the National Living Wage will hit small and medium-sized businesses like his, which traditionally employ lower-paid workers.
Announced by Chancellor Rachel Reeves yesterday, employers’ National Insurance contributions are due to rise 15%, an increase of 1.2 percentage points.
The threshold at which companies start paying this will also fall from £9,100 to £5,000.
From April 2025, the National Living Wage (the minimum wage for over-21s) will rise from £11.44 to £12.20.
“Who’s going to pay for it? I just closed a restaurant because it doesn’t make any money,” said Mr Nairn, whose Bridge of Allan eatery Nairn’s shut its doors in September.
“This kind of feels like the nail in the coffin for some businesses.
“Nobody, least of all me, is saying that people should work for peanuts.
“I absolutely don’t agree with that, and I want our guys to be well-rewarded.”
But the 65-year-old argued staff working in hospitality should be paid according to their level of seniority, experience and skill level.
“The problem is, if I have to pay a pot washer £12.40 an hour, what am I going to pay the sous chef? You can see the increments.”
‘Is it worth doing this?’
Mr Nairn said he and his wife and business partner Julia are now trying to figure out how to find around between £600 and £800 more per employee per year to offset the National Insurance increases.
He called the change a “disincentive” for business owners.
“The chancellor said that she realised it would impact business, but I don’t think she really realises the kind of businesses it impacts, and the kind of impact that it’s going to have,” he said.
The restaurateur told The Courier he is unlikely to hire an apprentice this year as he normally does, as an example of how the hospitality sector could be hurt by the Budget.
Mr Nairn warned small and medium-sized restaurants, already struggling with high energy costs and post-Covid, will end up closing as a direct result of the UK Government’s fiscal decisions.
“I think it will force people to reassess what they do – is it worth doing this, or go and work for somebody else?”
“Or go and work for a big corporation, or just retire? It’s not a great landscape.”
Mr Nairn is the latest business owner to raise concerns over Labour’s first Budget.
Yesterday fellow restaurant boss Kelly Fairweather, Â whose business interests include The Selkie and Sol Y Sombra in Broughty Ferry, said she will have to raise prices as a result of the Autumn Budget.
And Stephen Leckie, owner of Crieff Hydro, said the increases will cost him more than £1 million.
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