"Leveling Up," a United Kingdom government program aimed at advancing social and economic equity, is expected to have direct benefits to businesses, including hotels, in the country.
Those benefits could come in the form of increased discretionary spending for business owners, as well as a reexamination of government taxes on businesses — or business rates.
The ultimate aim is a fairer distribution of opportunity, income and capital across the country, which in part addresses decades-old criticism that political, cultural and economic opportunity is weighted toward London and its surrounding southeast counties.
Hoteliers in the country have been concerned over the continued demise of traditional High Streets, on which many hotels sit, due to shops and restaurants closing. High Street is a common street name for the primary business street of a city, town, or other population center.
Speaking at a Westminster Social Policy Forum webinar on Jan. 12, Bridget Rosewell, commissioner of the National Infrastructure Commission, said one of the three goals of the government’s 2023 National Infrastructure Assessment is to be leveling up.
Inequality is not just a case of the traditional North-South divide, speakers said, noting the allocation of funds for leveling up might be more a focus of political expediency than genuine need, in some cases.
Bill Grimsey, a former CEO of two High Street businesses, supermarket chain Iceland and building-supply and home-improvement chain Wickes, is author of the Grimsey Review, a government-commissioned report on the health of High Streets that was published in 2013 and updated in 2021.
“If [government] ministers are now serious about examining what the pandemic has done in particular regard to town centers, they have got to learn from their mistakes … and the very first one of those is business rates. The government has to stop prevaricating over business rates, stop kicking the can down the road and deal with it,” he said.
Grimsey added business rates are the most critical issue affecting city centers.
“We need to have a complete review of it. My personal view is that [business rates] should be abolished altogether, and I think it should be replaced by a sales tax of 2%, which would raise exactly the same amount of money,” he said.
He added sustainability must be at the heart of economic policies, and joint management of risk should be encouraged so that every business benefits.
Hotel industry lobbying organization UKHospitality has called for changes to business rates for some time.
Speaking to Hotel News Now, Tom Magnuson, CEO of Magnuson Hotels, said he is optimistic about High Streets, which are essential to his hotels, as well as those of the U.K.’s two largest budget chains, Premier Inn and Travelodge.
He said both chains will create focal points for many High Streets.
“Travelodge and Premier Inn will come out of the gate, and Airbnb will take no prisoners, so this is a really good time to evaluate what my platform is, what my resources are. … When we all come out of [COVID-19] we are going to have to source new business segments,” he said.
Magnuson said there are new sources of financing available that look at capital allocation differently.
“These new startup banks, they are saying what we’re saying: We have got to get in here and protect our life. It no longer can be about alien spaceships coming in and sucking it all out,” Magnuson said.
Be the Change
Gavin Bostock, group head of head of corporate affairs of railway franchise The Go Ahead Group, said the demise of traditional retail could be an opportunity to create more unique town centers.
“A few years back, people were always complaining about clone towns. If you went to different towns and cities, people would say they were all just the same, with the same names and the same shops," he said. “There is an opportunity linked very much with heritage, to create more of a sense of place. Don’t be afraid to change but take people with you."
The term “leveling up” came to the attention of the populace in July 2021 when Prime Minister Boris Johnson outlined in a speech that the process "is not just aimed at creating opportunity throughout the U.K., it is about relieving the pressure in the parts that are overheating.”
In September 2021, the government’s Ministry of Housing, Communities & Local Government became the Department for Leveling Up, Housing & Communities.
As part of the new ministry’s work, the Hospitality & Tourism All-Party Parliamentary Group launched a consultation process on the leveling-up process for some cities and regions in the U.K. titled “After the Vaccine: Saving the U.K.’s Town and City Centers Post-COVID-19.”
A government white paper will be released later this year, with a strategy stemming from its findings and suggestions.
None of this means London will not continue to prosper, webinar speakers said.
Muniya Barua, managing director of policy and strategy at London First, said pre-COVID-19, London provided a tax surplus of 39 billion pounds sterling ($53 billion).
“So [London] is critical, and London is not being ‘talked up’ sufficiently,” she added.
Chris Sheppardson, CEO of business advisory EP Business in Hospitality, said while there is a “genuine need for [leveling up] to happen across the U.K., London will always be the center. It will require new thinking and new investment.”