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Spectator
16-07-2025
- Business
- Spectator
Do we really need state-funded restaurants?
Two British cities, Dundee and Nottingham, have been chosen as trial sites for a new government scheme to be piloted next year: state-subsidised restaurants. The Department for Science, Innovation and Technology has put up £1.5 million for the 12-month trial, initiated by the campaign group Nourish Scotland. If the restaurants are successful, they'll be rolled out across Britain – nourishing us all – with a subsidised meal for £3. Inspired by second world war state-funded canteens, they're going to be called 'Public Diners' – clever branding, with its quasi-American vibe. Their branding matters because – as anyone who ever ate greasy slop from a tray at a state-run stolovaya in Soviet Russia remembers – no-frills, state-funded restaurants are intrinsically drained of glamour. Today's fastidious British public will require a touch of coolness to entice them in. Winston Churchill also understood that branding mattered. When those state-funded canteens got going in 1940, he decreed that their name, 'communal feeding centres', was 'an odious expression, redolent of communism and the workhouse'. At one stroke, he transformed their image by branding them 'British Restaurants'. 'Everyone,' he said, 'associates the word 'restaurant' with a good meal.' The slogan for the new Public Diners on Nourish Scotland's website is 'an idea whose time has come'. 'They are a holistic food system intervention: for public health, climate and the right to food.' (So we're going to be preached at in noun-lumps, as well as fed.) If all goes to plan, we'll soon see these new, climate-friendly, taxpayer-subsidised diners, inspired also by Turkish public restaurants, Mexican public dining rooms and Polish milk bars. Are those countries really now our economic role models? It doesn't give one much confidence in how things are going. Hospitality entrepreneurs and executives are neither pleased nor impressed. These diners are 'a ludicrous idea,' says Hugh Osmond, co-founder of Pizza Express. Luke Johnson, chairman of Gail's, says the idea that state-backed restaurants could operate more efficiently than the private sector is 'beyond a joke'. You can see why they're worried. Life is tough enough for restaurant owners – hit with ballooning, government-enforced overheads – without this new undercutting from state-funded establishments. But you could argue that commercial restaurants have only themselves to blame. Their prices have rocketed far more steeply than people's pay. In the last ten years, the cost of a Pizza Express 'Margherita' pizza has gone up from £7.55 to £14.95. If the British salary had kept pace with the increasing price of a Margherita, it would have risen from £27,600 to £53,000 – whereas in fact it's £37,500. There may well be a need for 'somewhere where all of us can eat without stretching the budget'. 'What could possibly go wrong?' hospitality executives are wondering as they wait for the pilot branches of the diners to open. A contract to run them is expected to be tendered later this year. Though the restaurants themselves will be not-for-profit, the caterers who run them will be expecting to make money – as will the providers of the fittings and the produce. Governments don't have the best reputation when it comes to not being ripped off during the procurement process. The issue of precisely what food to serve is also going to be a minefield. Nourish Scotland's consultation exercise 'showed that there are plenty of challenges ahead when it comes to deciding on what food should be served in a Public Diner'. We're no longer the unfussy wartime population who gratefully scoffed a plateful of boiled cabbage and mashed potato. The food served in those wartime British Restaurants had three chief attributes: it was soft (designed for a nation with a high proportion of false teeth), bland (designed to avoid tummy upsets) and filling (designed to fatten up a thin population). Today's populace won't be so willing to eat up whatever's put in front of them. They'll expect their individual health- and religion-based dietary requirements to be respected. An added complication is that, far from aiming to fatten up the population, this new scheme aims to tackle obesity. The scheme also requires the food to be locally sourced, to fulfil the climate aspect of its brief. As Jeremy Clarkson showed us in the latest series of Clarkson's Farm, locally sourced food is expensive. How will that work, economically, for the taxpayer? It'll be fun seeing what dishes the various branches do decide to serve – and whether the scheme sparks a revival of distinctly British regional food. I hope the Dundee branch offers the local dish Cullen skink (smoked haddock and potato soup with milk), and the Nottingham one Sherwood Forest venison and stilton. Are Public Diners really 'an idea whose time has come', or are they in fact an idea whose time is long gone? The scheme's brochure celebrates, with some nostalgia, those morale-boosting wartime British Restaurants which brought everyone together. There was indeed a great charm about them. Kenneth Clark's wife Elizabeth arranged to borrow paintings from Buckingham Palace to hang on their walls, to cheer everyone up. Today's utopian ideal is that strangers will meet and make friends over their plates of spicy chickpea and potato tagine – and that this will be a new way of falling in love IRL rather than online. But British Restaurants had their moment – and that moment has gone. The government withdrew financial responsibility for them in 1949, and they dwindled away after rationing ended in the mid-1950s. The free market took over, and competitive hospitality businesses survived – or closed down – accordingly. Is this scheme really the best way to spend taxpayers' money? Essentially, those who don't go to the restaurants will be subsidising those who do. Surely our taxes would be better spent teaching schoolchildren how to fry an onion and make a cheap pasta sauce at home. This government is so much better at thinking of new ways of spending our money than of saving it.
Telegraph
11-07-2025
- Business
- Telegraph
Labour's ‘ludicrous' state-funded restaurants plan sparks backlash
Labour's plan to launch state-funded restaurants has sparked a backlash from hospitality chiefs who have branded the move 'anti-business'. Hugh Osmond, a serial restaurant entrepreneur who co-founded Pizza Express, said plans for government-backed Second World War-style diners were a 'ludicrous idea', arguing the restaurants would 'cost a lot of money, provide absolutely terrible food and, in the end, fail'. Luke Johnson, restaurant entrepreneur and chairman of Gail's, said the industry was already 'highly competitive', adding: 'The very idea that state-backed restaurants could operate more efficiently than the private sector is surely a bad joke.' Ministers this week said they were trialling new state-funded restaurants that would serve meals for as little as £3 in Nottingham and Dundee. The diners, which have received £1.5m of taxpayer funding, will resemble the subsidised civic kitchens of the 1940s. Peter Kyle, the Science and Technology Secretary, said the aim was to 'actively explore the best ways to get healthy food into the mouths of those who need it'. The trial could lead to the launch of similar schemes if successful. While the restaurants are targeted at poor households who struggle to access nutritious food, Anna Chworow of Nourish Scotland, which is behind one of the schemes, told the i paper the restaurants were 'aimed at everybody – the way a bus, library or public park is'. It suggests state-backed restaurants could compete against private businesses. Mr Johnson said: 'Politicians and civil servants should focus on their core activities like defence, law and order and education – and run them more effectively, rather than ludicrous displacement activity like 'state-sponsored diners'.' It comes as many restaurants struggle to stay afloat in the wake of the Government's tax raid earlier this year. Tough times for hospitality Figures have suggested that more than one in 10 restaurants are at risk of closure this year following the Chancellor's decision to raise National Insurance contributions and push up the minimum wage in April. More than 4,000 restaurants were forced to shut last year. UKHospitality has estimated that the Budget has cost the industry as much as £3.4bn extra each year. Kate Nicholls, chief executive of UKHospitality, urged ministers to turn their attention to easing pressures for existing restaurants rather than setting up state subsidised rivals. She said: 'You've got a third of the sector operating at a loss. The key thing here is the Government should focus more of its attention and resources on tackling the underlying causes of that. 'Fundamentally, the better way to help will be to get out of the way, and not add extra costs and regulatory burdens like packaging taxes, tourism taxes, employment taxes.' It comes amid concerns that further regulation is on the horizon. The Telegraph recently revealed that Labour is drawing up plans to compel large restaurant chains and fast food giants to cut diners' calories. The proposals are being looked at as part of a broader obesity strategy launched by the Government, which will also set new targets for supermarkets to stop shoppers buying so many sugary and salty snacks. Under the new plans, large chains and fast food giants are expected to have to report how many calories customers consume on average, and show how they have reduced that number. Ms Nicholls last month said the sector had been 'totally blindsided' by the plans. Phil Thorley, boss of Kent pub chain Thorley Taverns, said ministers needed to 'give publicans and restaurateurs a chance'. He said: 'Hospitality has been hit hardest by the National Insurance contributions and the increase in national minimum wage and the Government is now trying to run restaurants. They can't run the country.' The boss of a restaurant group that operates dozens of locations across the country told The Telegraph: 'This is just another example of an anti-business government making ill-thought-through decisions. Ultimately this will cost the very people they are trying to help by reducing employment prospects in a sector that employs so many people.' Another described the state-funded restaurants plan as 'totally ridiculous' and said it would 'cost a lot of money, be utterly s--- and fail miserably'. A Government spokesman said: 'This is a complete misrepresentation of this project – which is a limited-time research pilot, exploring ways of getting low-cost nutritious food to those who need it most, to help people live healthier lives. 'The Government is backing hospitality businesses and permanently cutting business rates, including for restaurants, to help ease the pressure on the sector and help it grow as part of our Plan for Change.'
