A Gwynedd hotel could become "unviable" as it faces a tsunami of extra costs in the coming weeks and months. The business is staring into a bleak financial future as energy costs, VAT, and National Insurance payments all spike.
Dwyfor Meirionnydd MS Mabon ap Gwynfor is highlighting the plight of the business and has written to Chancellor Rishi Sunak to call for more support for them and thousands of firms in a similar situation across Wales and the UK.
The hotel - that employs over 30 workers - did not want to be named but has listed all the extra costs it now faces.
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- Energy. It currently pays 17p per unit of electricity - with a monthly bill of around £4,700. This is set to almost quadruple in the autumn to 57p per unit.
- National Insurance: Employers paid 13.8% but this has risen to 15.05% from April 2022 - an increase of nearly 10% in the amount of NI paid.
- VAT: UK Government returned the VAT rate charged in the hospitality sector to 20% in April - an increase from 12%.
Fuel costs: The hospitality and tourism sectors are now banned from using heavily rebated red diesel so will face a hike in costs.
Staff and suppliers: Food and drink costs are being hiked while staff costs are also going up - with inflation running at over 7%.
Cooking oil: This is highlighted in the price of cooking oil which has gone from £19.99 a drum to £48 in a matter of weeks.
Mr ap Gwynfor said: "These and other similar increases are slowly killing these small businesses. They are really concerned that their business will soon be unviable.
"This is one example, which will be replicated across the nation."
In his letter to Mr Sunak he calls on the chancellor to act on VAT, energy costs and to reverse the National Insurance hike.
The MS has himself been criticised for supporting a tourism tax in Wales that would add to the cost of holidays - but he said this was currently due for consultation in the autumn and at the very earliest be in place in the next financial year.
He added: "The hospitality sector has taken a battering over the last couple of years, and staffing continues to be a big problem. The last thing the sector and the staff who work diligently in the sector needs is unnecessary cost increases.
"The Government should be there to support the sector not penalise them like they’ve we’ve seen happen over recent months. The UK Government can reverse these damaging tax hikes and can re-introduce a price cap on energy prices, like they’ve done in France.
"While we are seeing energy cost rises across the globe, these are political choices that the government can take here at home.
"Not supporting the sector and those suffering from the cost of living crisis is a choice. I urge the Government to support our people and businesses by reversing these damaging decisions and give urgent assistance during these difficult times.”
Prime Minister Boris Johnson's plan for the year has been set out in the Queen's Speech and included pledged to "strengthen the economy and help ease the cost of living".
Secretary of State for Wales Simon Hart said: “This is a Queen’s Speech which delivers for Wales and the whole of the UK.
“The rising cost of living is a priority for so many people in Wales. The measures set out today for the coming Parliament will grow our economy as we recover from the Covid pandemic by creating more high wage, high skilled jobs and levelling up the country."
But the programme laid out has already come under fire for a "lack of substance" and any immediate measures to ease costs.
In Wales, the tourism and hospitality sector has been critical of proposals for a tax on visitors - with a consultation due to start this autumn.
On the proposed Welsh Government tourism tax, Mr ap Gwynfor said: "A consultation will be held in the autumn so at best a form of tourism tax won’t be introduced until the next financial year. It won’t be a tax on business, but on visitors, part of their budget as they prepare to visit, just like visitors are now having to pay £7.50 to park in the Brecon Beacons to climb Pen y Fan.
"Having looked at tourism taxes across the globe, there are numerous different models, and most suggest a very modest fee for smaller venues, like B&Bs etc. I genuinely don’t think it will impact the sector here, and could actually benefit the sector."
