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UK Hoteliers Say a Coherent Plan Is Needed as UK Prime Minister Boris Johnson Resigns

Johnson Remains in Role Until New Leader Is Found
Boris Johnson announces his retirement as Britain's Conservative Party Leader Thursday outside his residence at 10 Downing Street. (Getty Images)
Boris Johnson announces his retirement as Britain's Conservative Party Leader Thursday outside his residence at 10 Downing Street. (Getty Images)
Hotel News Now
July 7, 2022 | 1:13 P.M.

United Kingdom Prime Minister Boris Johnson has announced he will resign after several scandals and numerous ministerial resignations left him without the authority needed to deliver his government’s policies.

At a briefing to journalists in front of the PM’s official residence, 10 Downing Street, Johnson said he would remain as prime minister for another few months while his Conservative Party elects a new leader, likely to be in time for the annual Conservative Party conference in October, although some in the government are calling for him to quit immediately.

“It is clearly now the will of the Parliamentary Conservative Party that there should be a new leader of that party and therefore a new prime minister. … The process of choosing that new leader should begin now, and the timetable will be announced next week. I have today appointed a cabinet to serve, as I will, until a new leader is in place,” he said.

However, Johnson could be prevented from staying on by the 1922 Committee, a long-standing group of Conservative members of Parliament who decide the process of party elections.

Johnson won a vote of no confidence in his leadership on June 7.

One cabinet minister who urged Johnson to resign earlier this week is Nadhim Zahawi, who became Chancellor of the Exchequer on July 5 following the resignation of Rishi Sunak.

More than 50 cabinet and senior government officials have resigned in the past few days, the tipping point being questions of his leadership surrounding how much Johnson knew about allegations of sexual harassment pointed at MP Christopher Pincher, the government’s deputy chief whip.

The minister for education has changed three times in as many days, and since his resignation today, Johnson has appointed a completely new cabinet to oversee distinct responsibilities within government.

In British politics, the electorate technically vote for their choice of political party, and it is the MPs representing the winning political party that elect their leader, the prime minister, who then chooses his or her cabinet.

Prime ministers can be thrown out of office at any time. This latest saga comes at a time of increasing inflation, a cost-of-living crisis and business slowly recovering from more than two years of the COVID-19 pandemic.

Johnson was largely credited with gaining a healthy majority at the last general election, in December 2019, with several parliamentary constituencies long held by the opposition Labour Party being won by his Conservative Party.

Voters’ attitudes to Brexit were deemed particularly sensitive in the 2019 elections, and Johnson received praise for the U.K. rollout of COVID-19 vaccinations.

One of the government’s principal policies is the so-called “leveling up” of the U.K. — the more balanced division of capital, jobs, infrastructure, technology and transportation around the country.

Traditionally, the largest share of capital has been invested in London and the countries surrounding it.

This week, Michael Gove — the minister for leveling up — also urged Johnson to step aside and was swiftly removed from office by Johnson for doing so.

Industry Reaction

Kate Nicholls, CEO of advocacy group UKHospitality, said that what the hospitality industry needs at this moment is stability “to quickly restore business and consumer confidence and to demonstrate that there is a clear and coherent plan to address the economic storm.“

“With rising labor costs, energy prices and cost pressures, we desperately need a coherent plan that addresses the costs of doing business, in order to maintain this crucial investment in local communities,“ Nicholls said.

Russell Kett, chairman of business advisory HVS London, agreed the U.K. needs to avoid further uncertainty, which he said leads to instability.

“Whether you are a traveler looking to book a holiday or business trip; an airline seeking to fill seats and make routes operate profitability; a hotelier making enough money to employ and pay staff, and to support local suppliers, any uncertainty means you will take longer to make essential decisions, causing businesses to operate less profitably, experience greater cash-flow pressures and take longer to achieve a satisfactory return on investment," Kett said.

“Without stability at the government level, these ‘micro’ issues will be exacerbated. At the ‘macro’ level, inflation will continue to rage, industrial disputes will accelerate, employment decisions will be further delayed, interest rates will rise and [gross domestic product] will fall, leading to recession. And that’s before another wave of COVID knocks us for six,“ he added.

Janice Gault, CEO of Northern Ireland Hotels Federation, said that her region also is experiencing political turmoil due to ramifications from the 2017 collapse of the Northern Ireland Executive, which resumed governance in January 2020, right before the onset of the pandemic, only to now have stumbled.

“The hotel sector in Northern Ireland, like many other business sectors, has experienced considerable turmoil over the last number of months: rampant inflation, huge increases in energy costs, supplier issues and a labor shortage. However, the industry has traded well from quarter two (2022) onwards and is keen to capitalize on demand for holidays, events and business in a hotel setting,“ she said.

“Fiscal policy which supports business and allows the economy the opportunity to return to pre-pandemic levels of trading is imperative. Immigration and rules around entering the U.K. to work is something that the industry would like to see significantly reworked, recognizing the role the hotel sector, tourism and wider hospitality has to play in the economy,“ she added.

Nicholls said “business taxes need to be cut and planning red tape reduced if hospitality operators are to be able to create jobs, drive innovation and shore up the economy.”

At press time, the pound sterling was up 0.6% against the dollar to $1.198.

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