Atlas Bar owner Mark Wrigley (Image: Andy Stenning)
A city bar owner has warned of a dystopian future where only big chain pubs and restaurants survive, thanks to Rachel Reeves’ crippling Autumn Budget and National Insurance hikes.
Mark Wrigley, 61, who runs Manchester’s iconic Atlas Bar, says independent small businesses like his will be ‘destroyed’ by the financial changes.
It was a difficult budget for the hospitality sector with a large part of the new tax burden falling on the shoulders of a sector that has not had a break after , lockdowns and soaring record inflation.
The Chancellor announced a rise in employers’ national insurance contributions (NICs), a lowering of the threshold for when those NICs start to be paid, rises in the minimum wage on top of a cut in business rates support.
Atlas Bar in Manchester city centre (Image: Andy Stenning)
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Shattered Mr Wrigley told the Daily Express: “It’s a tax on jobs and it will lead to wholesale pub closures. It’s beyond painful- and there’s no sense of any light at the end of the tunnel.
“Unless the National Insurances moves are reversed and there’s a cut in VAT only huge companies like Wetherspoons will be left. They will be able to just sit back, watch us go under and pick up market share.”
Mark took over Atlas with his wife Elaine in 2012. The smart café and speciality gin bar – boasting 570 different types at the last count – sits under the railway arches at the end of the city’s main Deansgate thoroughfare.
It attracts professionals, young and old, from 10am – for breakfast and brunch – through to nearly midnight.
Improving the property and building a customer base has been a labour of love for the couple, whose four children have all worked there.
Atlas Bar now has a turnover of £1.5m and employs 27 people, both full and part-time, on £1 above minimum wage.
But Mark watched Rachel Reeves reveal her Autumn Budget with mounting dismay. It will pile at least £28,000 a year onto his cost base – in higher wages, business rates and employers’ National Insurance contributions alone.
He was planning to extend opening hours and take on two more staff. Now he faces losing two and abolishing four-day week working.
The “modest salary” he was taking out of this year’s £48,000 net profit has practically disappeared.
Atlas Bar owner Mark Wrigley (Image: Andy Stenning)
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Atlas Bar owner Mark Wrigley (Image: Andy Stenning)
He told us: “I’m not getting anything now. I’m just doing charity work. I’m effectively a tax collector for the government. If it weren’t for my family I’d consider walking away.”
When MPs cheered the penny off a pint announcement, he was shouting at the TV screen.
He fumed: “That showed me they have no idea. I sold more than 100,000 pints of beer last year.
“I’ve calculated I’d need to increase by around 30p a pint to recover the money given to Government. But we then need to add VAT on top. So that’s getting close to 40p on a pint.
“All the mood music ahead of the Budget was that it would be about growth. I was shocked when I heard the actual Budget. They’re getting away with murder.
“We all want better schools and hospitals, but this is stealing from small businesses.
“The government insists small businesses won’t be affected, but they define them as firms with no more than four employees who are on the minimum wage. I don’t know one pub or restaurant in the UK that fits that bill.”
Mark’s business rates – currently at a post- 75 per cent reduction – will rise by £12,000 in April when the rate reduction drops to 40 per cent.
His NI bill will go up by £16,500 – thanks to a 1.2 per cent rise in the rate and the change in the level at which it kicks in (now £5,000 instead £9,100). A third of his team were below the threshold. Now none of them are.
He has 18 months left to run on repaying his £100K loan –much of which was used to repair the building after months of being shut down during the pandemic.
His seven-year energy fix is about to come to an end sending fuel bills soaring to boot and the cost of raw materials has also rocketed. A full English breakfast that used to retail at £8.50 now costs £14.50 but brings in less profit.
Mark also points to VAT which he says is “crippling hospitality”, explaining: “We buy eggs, bacon and sausages, then we heat them up and the Government takes 20 per cent of our hard work.”
Atlas Bar owner Mark Wrigley (Image: Andy Stenning)
The fact that the financial hit comes alongside improved employment rights for staff only adds to his problems.
Dealing with poor performers is already a challenge – and will make Atlas ‘more cautious’ about recruitment. The stricter rules around zero-hours contracts mean he will also have more admin to contend with.
Mark went on: “I never use zero hour contracts anyway but in the past we’ve been able to be flexible with staff who wanted to change their hours…. they may be students and have a dissertation to write.
“Now I will have to have everything in writing or risk litigation.”
Mark has written several letters to his local MP Lisa Nandy, and to Sir , eager to explain what the hospitality industry needs right now. He has not had one reply.
He told us: “One thing that would breathe oxygen back into business for us would be to reduce VAT and put the NI level back to £9,100. They should also leave business rate relief at 75 per cent until the whole system is reformed.
“I really hope Labour rethink this. I’m not going to attack the government for making any U-turns if those U-turns save businesses like ours.”
Like the Atlas of Greek mythology, Mark feels like he carries the weight of the world on his shoulders. “At the moment”, he said. “I’m just trying to find a way through.”
COMMENT – The British Institute of Innkeeping:
A survey from the British Institute of Innkeeping (BII) suggests the Budget bombshells will lead to a quarter of all its pubs shutting down.
The BII, which represents independently operating pubs in every UK community, says its members were already struggling to make a profit ahead of the Budget announcements.
The new costs of employment and increases in business rates will render 80 per cent unprofitable, leading to at least one in four closing, it said.
Three quarters (75 per cent) are expected to cut staff hours, 40 per cent will reduce opening hours and 1-in-3 will make staff redundant.
The BII said: “Our members’ pubs provide accessible, skilled jobs in every community – for many, their first job.
“They pride themselves on providing job opportunities with rapid progression, leading to high levels of remuneration. The steps taken by the Chancellor in the Budget announcement will simply lead to lost jobs.”
CEO Steve Alton summed it up in one word: “Devastating.”
CASE STUDY – The effects of the Budget on bar staff and punters
Atlas Bar manager Naomi Hepworth (Image: Andy Stenning)
Manager Naomi Hepworth is in her 11th year at Atlas Bar and as the mother of a seven year-old son, she relies on her wages – but now she’s admits she fears for the future.
Naomi, 33, told the Daily Express how bar owner Mark rang her in her car just after Chancellor Rachel Reeves delivered her devastating, tax-raising Budget.
She remarked: “Mark rang me and I knew it was bad news. There should be more help available for businesses like this, one thousand per cent there should.
“Mark and Elaine are great employers and I know they’ll adapt and do their best to keep going, but it is a bit frightening.
“One of our managers is leaving to go to Australia and his position just won’t be filled. Christmas is coming and we’ll all have to work harder with fewer staff hours.. the workload will be greater for everybody.”
Meanwhile one customer, Kathleen, 79, sips her beer and bemoans rising prices everywhere telling us she prefers drinking in a pub or a bar rather than buying from a supermarket because it’s more social.
Kathleen explained: “I come for the atmosphere. But you used to be able to have an evening out and spend £10 or £15- now it’s more like £50 or £60.
“I definitely go out less than I used to because of the increasing prices.”