Latest news with #Itsu
The Guardian
16-03-2025
- Business
- The Guardian
‘A fundamental right': UK high street chains and restaurants challenged over refusal to accept cash
Major high street chains and restaurants, including Gail's bakery, Itsu and Zizzi, are being challenged by campaigners over their refusal to accept cash after a jump in consumers turning to notes and coins for daily spending. Following a steady decline in cash payments over the last decade, consumer groups says the cost of living crisis has seen more people turning to the traditional payment method for day-to-day spending. In 2023, 1.5 million adults in the UK were using cash for daily spending, a four-year high. Ron Delnevo, chair of the Payment Choice Alliance, which campaigns for the long-term future of cash services, said it was 'completely unacceptable' that some stores were rejecting cash. The alliance wants new laws similar to those in some other countries requiring organisations and retailers to accept cash. 'The vast majority of the public want cash to be honoured as a payment,' he said. 'These businesses are letting down the public.' Delnevo said a survey conducted by YouGov in June 2023 on behalf of the alliance revealed that 71% of British adults would support a legal requirement for businesses to accept cash. Gail's, which has more than 150 stores, says going cashless has 'environmental benefits' in eliminating the need for cash collection and delivery. Itsu, which promotes 'affordable, nutritious food' rolled out cashless payments after a successful trial, and Zizzi says it only accepts card and contactless payments for the 'smoothest and fastest' payment experience. The coffee and bakery chain Pret a Manger has piloted cashless outlets but still accepts cash in most of its 490 shops in the UK. It found the cashless service was faster but decided against a wider roll-out in favour of customer choice. The Treasury select committee is expected to report shortly on its inquiry into whether there is any need to regulate or mandate the acceptance of cash. An early day motion tabled in parliament last month calls for the government to implement legislation to require all businesses in the UK to accept cash, but ministers have said they have no plans to mandate the acceptance of cash. The motion highlights concerns at the 'rapidly increasing trend for UK businesses, local authorities and leisure facilities, including those supported by taxpayer funding, to refuse to accept cash for payments'. Car parks, train buffets and leisure centres are among the services that have gone cashless. Kate Osborne, the Labour MP for Jarrow and Gateshead East, who has signed the early day motion, said: 'It is a fundamental right that people should be able to use cash as a legal tender. When you are trying to budget, particularly if you are on a low income, cash is a simple way of doing it. I understand that many people are not using cash much of the time, but there should be choice for all. 'We are seeing more and more retailers offering card-only payments, and it causes problems in constituencies like mine where we've got a high number of people who are digitally excluded or may choose not to do electronic banking.' Osborne said that cash can be more convenient. 'I've been on trains before and the system [for the buffet] has gone down and they can't take cash,' she said. 'You could be on a train for three or four hours, and you can't even buy a cup of tea.' Use of cash has fallen dramatically in the last decade, from more than half of payments in 2009 to about 12% in 2023. Yet it is still the second most frequently used method of payment in the UK after debit card. Cash accounted for 6bn payments in 2023, with the number of people who mainly use cash rising from about 900,000 in 2022 to 1.5m in 2023, according to figures from the trade association UK Finance. Ajay Banga, now president of the World Bank, revealed the roadmap of the finance industry in 2017 when, as chief executive of Mastercard, he stated in an interview: 'My enemy is cash.' The international finance industry now faces resistance over its eagerness for cashless transactions. Sweden has been at the forefront of countries moving towards a cashless society, with the New York Times reporting in 2018 that about 4,000 Swedes had implanted microchips in their hands to pay for travel or food, or enter keyless offices. Mounting cyber crime and the rising threat from Russia have led to a rethink, with residents now advised to keep enough cash at home for at least one week. While cash can help provide resilience in the event of an attack or collapse in the financial system, many consumers also turn to coins and notes for budgeting. A system known as 'cash stuffing' – using envelopes for different categories of spending – has racked up hundreds of millions of views on TikTok, but security experts advise against keeping large amounts of cash at home. May Fairweather, a financial coach and executive director at the nonprofit organisation Talk About Money, said the financial industry wanted 'frictionless' purchases because it made it easier for people to spend money. 'Cash adds friction, and that can be a good thing,' she said. 'It gives people time to think and time to make proper decisions.' She also said thatnotes and coins remind people trying to budget that money is 'finite'. The Financial Conduct Authority (FCA) says that about 3 million people continue to rely on cash, even as digital payments become more popular. It introduced rules last September requiring banks and building societies to ensure reasonable access to cash withdrawal and deposit services. A Treasury spokesperson said: 'We recognise that cash continues to be used by millions across the UK. While we have no plans to mandate cash acceptance, individual businesses can decide which payment methods they accept, and new rules introduced by the FCA support those that do want to continue accepting cash by enabling business to make deposits.' Gail's, Itsu and Zizzi have been contacted for comment.
Telegraph
14-03-2025
- Telegraph
I sampled Michelin-starred food in Japan – but it's the egg mayo sandwiches I'll remember
Presented in a beautiful, layered black box tied up with a ribbon, my first meal in Japan arrived in style. However, as I unfolded the trays of lovingly prepared food, it was as I suspected it might be: lots of raw fish. And, er… other stuff, some of it yellow and slimy. The guest next to me was impressed: 'This is exactly what I was looking forward to – a proper Japanese breakfast.'' I did not say 'this is exactly what I was dreading', but that would have been true. What I know about Japanese food could be written on the back of a receipt from Itsu – but look, I was giving it a go. I had flown down from Tokyo to Fukuoka, Japan's sixth-largest city. Fukuoka is on Kyushu Japan's third-largest – and most southerly – island and has a growing reputation for its cuisine. It had been a long journey and although I had a fantastic room in the Ritz Carlton, I was somewhat baffled by it. The bathroom consisted of two glass boxes inside each other, all of it which could be screened off. The design was superb, but it took me a while to figure out how to actually get inside it. Prior to breakfast the only thing I had eaten since my arrival were some enormous strawberries left for me in my room. Grown locally, they could have rivalled anything from Kent. Fukuoka, which means 'happy hills', is not on the usual Tokyo-Kyoto-Osaka circuit. It is, however, regularly cited as being one of the best places to live in Japan. After a couple of days there, I began to see why. It's walkable – unlike the massive sprawl of Tokyo – and the people are friendly; there are beaches and plenty of green space. There are lots of little bars, some fabulous modern architecture, plus a museum full of Buddhist statues, Miro and Dali. And then there's the food. On my first evening I dined at Yamaya Sohonten Zen in the Shirokane area of the city, a glass-walled restaurant supervised by Zaiyu Hasegawa, a leading figure in contemporary Japanese cuisine whose goal is to highlight Kyushu's food culture. Chef Abe Daishero was at the helm and everything looked very pretty – although I was not entirely clear what a lot of it was. A smiley face cut into a tiny piece of carrot? The claypot rice was a thing of beauty, each grain glistening gem like, but my favourite dish was a kind of deconstructed mackerel sushi, with lotus root tempura. It was all quite a contrast to Yoruzu, a tea and sake house in the Akasaka area of the city, which I visited to sample its pairings of teas and wagashi (Japanese sweets). The menu – served in a small, dark zen space – was based around a low-key performance by the owner Suguru Tokobusi, who serves his teas in different temperatures from a kettle he designed himself, in what feels like a modern tea ceremony. His assistants bustle around in white coats, which adds to the strangeness. I didn't actually like the very strong tea – I guess this is like the different roasts of coffee – but I liked Tokobusi very much. He handed me a bowl that was 400 years old and told me to hold the decoration away from myself; he pointed out that the bowl had a deliberate imperfection, as all things must. One could sense the underlying philosophy at work here. It reminded me of Leonard Cohen's line: 'There is a crack in everything, that's how the light gets in.' There was something very moving about the care involved in all this. Tokobusi laughed at me because I really loved a smoked radish morsel he served, saying that it indicated I was a woman who likes 'hard liquor'. Some kind of psychic, surely? The following day I bowed and made a wish at the local Jotenji temple near the Mikasa river, with its mad cartoonish entrance of a pink smiling face. But mostly I wished my stomach didn't feel quite so weird. My next meal was lunch at Sushi Gyoten. It's a tiny little place that could seat no more than about eight customers at a time, all perched around one table while Kenji Gyoten himself works its magic. No wonder he has three Michelin stars. As he placed a huge hairy crab that was still alive on the counter, I felt as if I was watching a master at work. He followed that with a slab of tuna as big as a side of beef, explaining all the different cuts. I tried some creamy puffer fish (they can be poisonous, but I trusted him not to kill me). The meal felt like a complete experience because he is an artist: each piece of sushi was an improvisation created as he responded both to the ingredients and to the people in front of him. Without question, this is dining as an elevated, astonishing experience. Having said all that, the place I really enjoyed my food the most was at the yatai (mobile food stalls) that Fukuoka is famous for. These pop-ups – each one taken down during the day and put up at night by the Naka river – are polythene shacks where you are crammed on a bench while the cook makes tiny gyoza and pork yakitori in front of you, or doles out bowls of ramen. Everyone drinks highballs and the whole experience feels friendly and without pretension. The same was true of Librun Craft Sake Brewery, which felt hip and fun: here sake comes in all sorts of flavours, including a horrible chocolatey one the owner had made for Valentine's day (my favourite was the verbena version). After all that food and drink, I felt I needed refreshment of a different sort. I went to an onsen in the Miyako Hotel Hakata I had moved to right by Hakata station, the warm baths fed by natural spring water. A fuss was made because I have a tattoo on my back but a plaster was found to cover it up and I tried not to stare at the Japanese women, all of us naked, scrubbing themselves. Every young woman I met in Fukuoka says they have no intention of getting married. Japan has a crisis of ageing on its hands (although I could not help but note the fantastic skin of the older women). Anthony Bourdain always said don't eat in hotels, head to where the locals eat. Later on, I found a bustling joint within the main rail station, where large groups were celebrating, and everyone was eating fried chicken. This turned out to be the very best fried chicken ever – and I have lived in Louisiana. The Korean influence was there: every mouthful had a proper crunch because karaage chicken is double fried after being marinated. As I headed away on the bullet train I knew I had been utterly spoilt with wonderful Michelin-starred food, but it is the yatai stalls I will remember. And the egg mayo sandwiches from the 7/11 that I snaffled while watching Sumo wrestling on TV. Did I mention them? Divine. Essentials Getting there Suzanne travelled as a guest of Fukuoka City. For more information, see gofukuoka. She flew with Etihad from Heathrow to Tokyo and then with Jetstar to Fukuoka. There are multiple direct flights daily between Tokyo and Fukuoka, or it is a five-hour train journey via Shinkansen. Staying there Ritz Carlton at Fukuoka Daimyo Garden City 2-6-50, Daimyo, Chuo Ward, Fukuoka, has doubles from £545 per night, room only. With the Style at 1 Chome-9-18 Hakataekiminami, Hakata Ward, Fukuoka, has doubles from £227, room only. Miyako Hotel Hakata at 2 Chome-1-1 Hakataekihigashi, Hakata Ward, Fukuoka, has doubles from £197, room only.
Telegraph
12-03-2025
- Business
- Telegraph
The high-street brands taking over the grocery aisle – and the ones actually worth paying for
Not content with dominating the high street, the restaurant chains want supremacy at the supermarket too. They've been sneaking their products on to the shelves, with sauces like the Nando's Perinaise, side dishes (looking at you, Pizza Express dough balls) and even the main event, with Gourmet Burger Kitchen's burgers and Itsu's gyoza vying for our attention. Even Greggs has got in on the action with sausage rolls and steak bakes from the bakery chain sold in Iceland. Leon, so long the bastion of the healthier fast food, launched frozen waffle fries in Sainsbury's in 2020 and is due to add chicken thigh burgers into supermarkets later this month. To be fair, its products do sometimes have fewer additives than other leading brands. Nonetheless, Leon founder and food campaigner Henry Dimbleby, who sold his share to Asda's owners in 2021, is presumably spinning in his Hackney townhouse. It's big business. Itsu grocery products make up 30 per cent of the brand's group sales of £48 million and founder Julian Metcalfe says that its grocery sales are forecast to overtake the restaurants' by 2026. Pizza Express, which first launched into supermarkets two decades ago, says that retail sales now exceed £100 million. In these cash-strapped times, shelling out for a restaurant brand might feel like much-needed self-care – even if it's strictly self-service. But with the supermarkets selling their own cheaper versions of the products, is it really worth paying extra? We tested some of the best sellers side by side to find out. Croissants High-street brand: Pret All Butter Croissants £3.60 (or £3 with Nectar) for 6 (60p per 55g croissant) at Sainsbury's Supermarket brand: Aldi Bon Appetit! All Butter Croissants £2.79 for 8 (35p per 55g croissant) at Aldi The small print: The ingredient lists are identical bar a mysterious 'enzyme' in the Aldi one. The Aldi croissants are about eight per cent higher in calories and fat. The flavour: Both croissants cook up beautifully, and have a proper flaky exterior and tender, buttery layers inside. The Aldi version tastes more classically buttery, while the Pret croissant has a strong tang of cultured butter that verges on rancid. The winner: Aldi – they're cheaper and nicer. I also tested the M&S frozen croissants (£4.75 for 8, M&S or Ocado) which were identical to the Aldi ones but, at nearly 60p each, not nearly such good value. Vegetable gyoza High-street brand: Itsu Vegetable Fusion Gyoza £3.98 (on sale for £3.48) for 270g (£14.74 per kg) at Asda Supermarket brand: Akira Vegetables Gyoza £2.40 for 240g (£10 per kg) at Asda The small print: Both products contain soy protein to ramp up the nutrition, but the Akira version is 51 per cent vegetables compared to Itsu's 37. Akira has a shorter ingredient list, with fewer UPF markers but the Itsu ones have more than twice as much protein. The flavour: The Akira gyoza are larger, weighing in at 21g to Itsu's 13g, so you get just 12 in a pack to Itsu's 20. Both have lovely delicately stretchy wrappers, but Akira's are more vegetable-y, while Itsu's have enough vegan protein mince to have a distinct meatiness. The winner: A draw – spring for Itsu if you need the protein, but otherwise Akira's are cheaper and just as good. Sausage rolls High-street brand: Greggs 4 Sausage Rolls £3.50 for 427g (82p per 100g) at Iceland Supermarket brand: Iceland 2 Jumbo Sausage Rolls £1.00 for 280g (36p per 100g) at Iceland The small print: Iceland's sausage rolls are larger than Greggs: 140g rather than 107g. Much of this extra seems to be pastry: from the cooked sausage rolls, the meat filling weighed 50g in the Greggs and 58g in the Iceland version. The Greggs roll has 18 ingredients that you wouldn't find in your store cupboard, compared with 11 in the Iceland version and the latter is also palm oil- and emulsifier-free. The flavour: Greggs pastry is very short, crisp and savoury, while the Iceland one is flakier. It's in the meat that the difference really shows – the Iceland sausage has the texture of a wet sponge, and little flavour apart from salt and cardboard. Greggs sausage is squishy but with a bit of granular texture and a meaty, spice-laced flavour. Winner: Greggs, though I can't say either will be on my shopping list. Dough balls £3.33 (on sale for £1.63) for 200g (£1.67 per 100g) at Asda Supermarket brand: Asda Garlic & Herb Doughballs £1.90 for 165g (£1.15 per 100g) at Asda The small print: With both palm oil and mono- and diglycerides of fatty acids featuring in the ingredients, the Asda dough balls are firmly in the ultra-processed camp. There is nothing weird in the Pizza Express ones. True, they have a pinch more salt, but the Asda version has 30 times more saturated fat. The flavour: The supermarket dough balls with a garlic butter filling taste pretty industrial, although they cook to an appetising crisp golden brown. The Pizza Express ones – just unfilled miniature bread rolls – stay rip-apart-tender and taste right. It's a bit more work to cut them apart and spread them with the garlic butter, but the flavour is fine – not over garlicky. Spicy mayonnaise High-street brand: Nandos Perinaise Hot Peri Peri Mayo £2.35 (on sale for £1.85) for 265g (89p per 100g) at Waitrose Supermarket brand: Waitrose Squeezy Piri Piri Mayo £1.50 for 280ml (54p per 100g) at Waitrose The small print: While both include preservative and colour, the Nando's version has a bigger range of additives – more stabilisers and a cocktail of antioxidants. Nando's has more than twice as much salt though both, happily, use free range eggs. The flavour: The Nando's mayo has a slightly deeper orange colour and a pleasing red pepper flavour. Both have a mellow punch of heat, but the Waitrose one has a more classic mayonnaise tang. Though each is good in its own way, only a true Nando's fanatic would notice the difference when squeezed over grilled chicken and chips. Winner: Waitrose Beef burgers High-street brand: Gourmet Burger Kitchen 2 Gourmet Beef Burgers £5.50 for 342g (£16.08 per kg) at M&S or Ocado Supermarket brand: M&S Our Best Ever 2 British Beef Burgers £5.25 for 340g (£15.44 per kg) at M&S or Ocado The small print: First round goes to GBK: the roughly shaped patties contain British beef, salt and pepper – that's it. The tidy M&S discs look oddly bright pink in comparison, and contain rice flour, potato flour, salt and preservative alongside British beef, beef fat and bone marrow. But the GBK burgers have nearly twice as much salt, even if they are lower in fat and saturates. The flavour: Tough competition for the GBK burger here, as the M&S version came top in our supermarket burger tasting 18 months ago. Both cook up nicely, with the GBK one still rosy in the middle after the specified cooking time. The M&S ones are gloriously juicy but taste bland next to the intensely meaty GBK ones – that extra salt is doing its job. Winner: GBK Waffle fries High-street brand: Leon Waffle Fries £2.85 for 550g (£5.18 per kg) at Morrisons Supermarket brand: Morrisons Waffle Fries £2 for 550g (£3.64 per kg) at Morrisons The small print: The Morrisons ones score slightly higher on the UPF ingredient front, as they contain flavouring, dextrose and paprika extract as well as 'raising agent (diphosphates)', while Leon's have only paprika extract and 'natural black pepper flavour'. But, oh dear – the salt. At 1.1g per 100g, Leon's have nearly three times as much as the Morrisons ones. The flavour: All but identical, though the Morrisons ones look slightly more speckled with paprika, and I detect a fraction more spicy heat in the Leon version. They taste like eating a bag of heated-up crisps: definitely not the stuff of everyday meals, methinks, so I can't get too uptight about the ultra-processed food factor. Winner: Morrisons – for flavour, price and salt content. Hot honey pizza High-street brand: Franco Manca Salami Onion Chilli Infused Honey Pizza £5.75 for 475g (£1.21 per 100g) at Tesco Supermarket brand: Tesco Finest Salsiccia Picante with Hot Honey Pizza £4.45 for 400g (£1.19 per 100g) at Tesco The small print: Other than a bit of xanthan gum in the honey drizzle, the Franco Manca pizza has a pretty good ingredients list but nearly 3.6g salt per half pizza serving – that's more than half your recommended daily maximum. The Tesco one (which has a blameless ingredients list) is much better at 2.3g, though that still puts it in the 'high salt' category. The flavour: The Franco Manca pizza is smaller (26cm across to Tesco's 28cm) but it has much more cheese – too much perhaps, as it's not great quality. Both have ten slices of sausage, and a sachet of 'chilli honey drizzle' which tastes like sweet chilli sauce. The base of the FM version is slightly better quality, with more puff at the edge and a nice chew, but Tesco's has pretty slices of fresh red chilli and rough chopped flat leaf parsley which make it feel more loved.
Yahoo
16-02-2025
- Business
- Yahoo
Rachel Reeves's £25bn gamble to fix Britain
Itsu's maki-making robots are able to churn out almost 5,000 sushi pieces every single hour. Julian Metcalfe, the founder of the Asian takeaway chain, says the machines help his company do more with less at dozens of its sites across the UK. 'We remove repetitive, unskilled, boring jobs so we can invest more money paying trained team members to do high-quality, fresh food preparation on site,' he says. Rachel Reeves wants more bosses to be like Metcalfe, investing in a way that creates a higher-skilled, more productive economy. The problem is, she has also just hit them with a £25bn tax raid that will reduce investment and, in the worst cases, lead to big job losses. 'Generally speaking, there is no doubt the ever-increasing costs of employing staff in the hospitality business – made worse by the recent National Insurance hikes – will reduce the likelihood of new hires being taken on, reduce opportunity and jobs, as well as raising prices for customers,' says Metcalfe. That may sound devastating for the economy – but could it be part of the Chancellor's grand plan? There is some speculation that the Chancellor is secretly hoping her £25bn tax raid will push companies to invest more in technology and training rather than simply relying on low-cost, low-skilled workers. Higher investment will in turn boost productivity. Higher productivity, which has been elusive since the financial crisis, is the key to unlocking higher living standards. When productivity improves, so do company profits and staff wages. This leads to stronger growth, a bigger economy, rising tax revenues and smaller borrowing bills. The Office for Budget Responsibility (OBR), the Government's tax and spending watchdog, estimates that improving annual productivity growth by 0.5pc will reduce borrowing by more than £40bn by 2028-29 – the exact same number as Reeves's record tax raid. One of Reeves's own advisers, the economist John Van Reenen, has suggested that a reliance on cheap labour is to blame for Britain's economic crisis. Making labour more expensive may, therefore, be one way to fix the problem. The cost of employing someone on the minimum wage is set to rise above £24,000 this year once you take into account the rise in National Insurance. Investing in things like machinery and software can help to boost the productivity of individual workers. The maki-making robots, for example, leave Itsu's workers with more time to serve customers. Not only could higher business investment boost the economy, it could also help wean Britain off a reliance on overseas workers to fill gaps in the jobs market. If this is part of the Chancellor's logic, it is a high-risk gamble. The tax raid is expected to trigger potentially thousands of job losses. It could also end up leaving many unskilled workers on the scrap heap. Most economists will tell you that a bit of creative destruction is good for the economy. However, there are winners and losers. Kate Nicholls, boss of industry body UKHospitality, says: 'I think there was a justification to invest in productivity improvements and make the businesses more productive, but in sectors like hospitality that rely upon service and people, that seems very difficult to achieve.' Nicholls argues that trying to force change by hiking National Insurance is 'regressive and disproportionately impacts the very sectors who cannot make the most of those kind of changes'. 'I can see how it works – make it more expensive to employ someone in a factory or an office and automate it and make the job more productive and the factory more productive – but I don't see how that works in hospitality,' she says. 'You can automate the ordering, the labour scheduling to free up some of the staff to do front line service rather than running between the two. But ultimately you can't take away service.' Greg Thwaites, of the Resolution Foundation, a think tank, rejects the argument that Reeves had a hidden agenda to trigger creative destruction with her Budget. 'I think that they basically needed to raise a lot of money, and they wanted to be able to say with a straight-ish face that they'd done that without raising taxes on working people,' he says. However, he says change is needed, even though it will involve job losses. In a recent report, the think tank said: 'If some sectors grow, others will have to shrink. Hospitality represents a higher share of consumption in the UK than anywhere else in Europe, because it is relatively cheap. 'Improving conditions for workers in this and other lower productivity sectors will over time change that. Better pay for low-earners in hospitality, paid for by higher prices that most affect better-off households, will create a more equal UK.' Ashwin Kumar, of the Institute of Public Policy Research (IPPR), says: 'The UK does have a problem with too many low paid staff not having opportunities for progression or any functional training beyond health and safety and induction.' Many part-time workers have been left to languish on the sidelines because of the types of jobs that usually offer shorter hours. 'It means that lots and lots of women essentially who have to work part time are basically trading down in terms of the jobs they do,' Kumar says. 'And that's manifestly a waste of our productivity.' Productivity improvements may also – eventually – help to reduce Britain's reliance on migration. Growth in employment within the health and social sectors, hotels and retail has almost all been entirely driven by non-EU born workers in recent years. The Office for National Statistics (ONS) expects migration to drive all of Britain's population growth for years to come. 'There are stories about people using agencies to recruit from overseas because it's convenient for them,' Kumar says. 'I think if we get to a position where employers end up having a more sustained commitment to staff, like banning zero-hours contracts, it will be a positive signal for who it's worth recruiting. 'Because if companies are nudged to invest more in their people, they are going to want people who are also going to have more of a commitment to staying around.' Not everyone agrees. Many business leaders warn that the pledge by Angela Rayner, the Deputy Prime Minister, to strengthen workers' rights will discourage companies from taking a chance on workers who are young or with fewer skills – the very people that Reeves says she wants to help get back into work. There is also the big question about how far we can automate. Metcalfe recently said he was reversing some of Itsu's use of robots. 'It's a question of balance,' he says. 'I think some business will over-automate and lose customers. 'The harmony between good value for money, quality handmade food and the use of modern technology is elusive. No humans should ever be left on any scrap heap. What a depressing thought.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
Telegraph
15-02-2025
- Business
- Telegraph
Rachel Reeves's £25bn gamble to fix Britain
Itsu's maki-making robots are able to churn out almost 5,000 sushi pieces every single hour. Julian Metcalfe, the founder of the Asian takeaway chain, says the machines help his company do more with less at dozens of its sites across the UK. 'We remove repetitive, unskilled, boring jobs so we can invest more money paying trained team members to do high-quality, fresh food preparation on site,' he says. Rachel Reeves wants more bosses to be like Metcalfe, investing in a way that creates a higher-skilled, more productive economy. The problem is, she has also just hit them with a £25bn tax raid that will reduce investment and, in the worst cases, lead to big job losses. 'Generally speaking, there is no doubt the ever-increasing costs of employing staff in the hospitality business – made worse by the recent National Insurance hikes – will reduce the likelihood of new hires being taken on, reduce opportunity and jobs, as well as raising prices for customers,' says Metcalfe. That may sound devastating for the economy – but could it be part of the Chancellor's grand plan? There is some speculation that the Chancellor is secretly hoping her £25bn tax raid will push companies to invest more in technology and training rather than simply relying on low-cost, low-skilled workers. Higher investment will in turn boost productivity. Higher productivity, which has been elusive since the financial crisis, is the key to unlocking higher living standards. When productivity improves, so do company profits and staff wages. This leads to stronger growth, a bigger economy, rising tax revenues and smaller borrowing bills. The Office for Budget Responsibility (OBR), the Government's tax and spending watchdog, estimates that improving annual productivity growth by 0.5pc will reduce borrowing by more than £40bn by 2028-29 – the exact same number as Reeves's record tax raid. One of Reeves's own advisers, the economist John Van Reenen, has suggested that a reliance on cheap labour is to blame for Britain's economic crisis. Making labour more expensive may, therefore, be one way to fix the problem. The cost of employing someone on the minimum wage is set to rise above £24,000 this year once you take into account the rise in National Insurance. Investing in things like machinery and software can help to boost the productivity of individual workers. The maki-making robots, for example, leave Itsu's workers with more time to serve customers. Not only could higher business investment boost the economy, it could also help wean Britain off a reliance on overseas workers to fill gaps in the jobs market. If this is part of the Chancellor's logic, it is a high-risk gamble. The tax raid is expected to trigger potentially thousands of job losses. It could also end up leaving many unskilled workers on the scrap heap. Most economists will tell you that a bit of creative destruction is good for the economy. However, there are winners and losers. Kate Nicholls, boss of industry body UKHospitality, says: 'I think there was a justification to invest in productivity improvements and make the businesses more productive, but in sectors like hospitality that rely upon service and people, that seems very difficult to achieve.' Nicholls argues that trying to force change by raising National Insurance is 'regressive and disproportionately impacts the very sectors who cannot make the most of those kind of changes'. 'I can see how it works – make it more expensive to employ someone in a factory or an office and automate it and make the job more productive and the factory more productive – but I don't see how that works in hospitality,' she says. 'You can automate the ordering, the labour scheduling to free up some of the staff to do front line service rather than running between the two. But ultimately you can't take away service.' Greg Thwaites, of the Resolution Foundation, a think tank, rejects the argument that Reeves had a hidden agenda to trigger creative destruction with her Budget. 'I think that they basically needed to raise a lot of money, and they wanted to be able to say with a straight-ish face that they'd done that without raising taxes on working people,' he says. However, he says change is needed, even though it will involve job losses. In a recent report, the think tank said: 'If some sectors grow, others will have to shrink. Hospitality represents a higher share of consumption in the UK than anywhere else in Europe, because it is relatively cheap. 'Improving conditions for workers in this and other lower productivity sectors will over time change that. Better pay for low-earners in hospitality, paid for by higher prices that most affect better-off households, will create a more equal UK.' Ashwin Kumar, of the Institute of Public Policy Research (IPPR), says: 'The UK does have a problem with too many low-paid staff not having opportunities for progression or any functional training beyond health and safety and induction.' Many part-time workers have been left to languish on the sidelines because of the types of jobs that usually offer shorter hours. 'It means that lots and lots of women essentially who have to work part time are basically trading down in terms of the jobs they do,' Kumar says. 'And that's manifestly a waste of our productivity.' Productivity improvements may also – eventually – help to reduce Britain's reliance on migration. Growth in employment within the health and social sectors, hotels and retail has almost all been entirely driven by non-EU born workers in recent years. The Office for National Statistics (ONS) expects migration to drive all of Britain's population growth for years to come. 'There are stories about people using agencies to recruit from overseas because it's convenient for them,' Kumar says. 'I think if we get to a position where employers end up having a more sustained commitment to staff, like banning zero-hours contracts, it will be a positive signal for who it's worth recruiting. 'Because if companies are nudged to invest more in their people, they are going to want people who are also going to have more of a commitment to staying around.' Not everyone agrees. Many business leaders warn that the pledge by Angela Rayner, the Deputy Prime Minister, to strengthen workers' rights will discourage companies from taking a chance on workers who are young or with fewer skills – the very people that Reeves says she wants to help get back into work. There is also the big question about how far we can automate. Metcalfe recently said he was reversing some of Itsu's use of robots. 'It's a question of balance,' he says. 'I think some business will over-automate and lose customers. 'The harmony between good value for money, quality handmade food and the use of modern technology is elusive. No humans should ever be left on any scrap heap. What a depressing thought.'
