Hard times

0:00BBC Sounds, music, radio, podcasts. Wake Up To Money from BBC Five Live. Hello, welcome. It is Wake Up To Money today on the show. We're going to be hearing about tough times for small businesses. I'd like your thoughts as well. A Commons Committee report out this morning says firms are operating under pressures comparable to those experienced during the pandemic. Elsewhere, we're going to be looking at the hospitality trade, where it's no easier for those in that sector. After scores of UK pubs closing their doors in the last three months of 2025, more than half of small music venues as well failing to turn a profit.

0:40The global night time industry gathers today in Liverpool. So we'll try and find out a little bit more what's going to be top of their agenda. What at the minute is going wrong for our pubs and clubs? Perhaps one reason is I'll be watching too much telly.

0:56More subscription options on the way. what feels like an already crowded TV on demand market. There's going to be a new name for you to download and potentially subscribe to. We'll be finding out what HBO Max is going to be offering British viewers. Wake Up To Money with Sean Farrington. Good morning to you, T's Wake Up To Money on this Wednesday morning. It's the 11th of February. Thank you for being with us. 85058 is the number to use to get in touch with us this morning, Gab. particularly if you are working for a small business, running a small business, and you hear some of the issues we're discussing on the show this morning, does it feel to you like these times are tougher than they were during the pandemic?

1:42And if so, why? Let's get into what is it about the scenario right now? What is it about the world that we're coming from after the pandemic, after an energy price hike, after an era of low interest rates, that means at the moment for so many, it's so tough running small businesses as well. So 85058, we'll be hearing your thoughts and plenty others. We've got bosses on the show with us this morning to discuss that. Thank you for your messages already coming in as well. Kieran in Belfast saying people can't afford a night out. Have you bought around lately? That's in response to a request for your thoughts this morning, whether it's about the hospitality industry running a small business that we're going to be getting into it all.

2:27There's been a big report done by a group of MPs looking into how small businesses across all sectors in the economy are getting on at the moment and how that can be a bit of a tough time. And at the same time, there's a bit of a gathering of those in the pub, club, music, venue sector, the hospitality industry, the nighttime economy in particular, going to be having a few discussions later on in Liverpool today. I've got Ian Hoskins with me this morning. He's the director of Mar Pub Group. I've got a few bars and pubs under his watch. Ian, morning to you. Good morning, Sean. Thanks again for being with us.

3:07Just remind us what you've got and where, Ian. Yeah, so we've got five bars, restaurants, pubs all within that space. Some are more your traditional pub, others more event spaces, cafe bars, pubs with food. So they're all within the service industry and are all food-led hospitality operations. And whereabouts are you? All in Liverpool City Centre, so in quite a tight geographic area. We've got three pretty much along one street by the docks and another one. The other two actually are on a street called Bold Street, which is really well known for all its hospitality offerings. So, Ian, when the discussions kick off later today, I mean, they're not they're not the first time many in the industry will have been gathering.

3:58I'm sure you're a part of WhatsApp groups and LinkedIn conversations, all of that kind of thing where people are trying to exchange ideas to see what can work in the hospitality industry at the minute. What do you think is top of the agenda right now? Well, as you mentioned before, there's huge amounts of pressures coming from every different corner for people that run hospitality venues. And the one thing is hospitality operators come in all shapes and sizes. You know, it's the person that runs the cafe on your high street to, you know, multi-site operators of, you know, pubs and nightclubs and stuff.

4:43So even the, you know, the cafe bar that might be in a, you know, a museum, you know, and cultural offerings. So that it's a very, very broad industry. But, you know, broadly speaking, we're all facing the same problem. You know, there isn't enough money coming through the, you know, going into the tills, coming through the doors and costs are rising, you know, you know, faster than they have done before. Inflation is under control, but certainly the cost of goods. If you're working in a fresh food environment, you're always, always at the mercy of very, very schizophrenic price prices. and you know as you mentioned before the you know the hangover from from a lot of big shocks that the industry has had has meant that you know a lot of operators don't have that you know that nest egg anymore to be able to weather the storm you know energy prices food prices you know the cost of employing staff which you know that that is what we're about and and that feels like it's a very real problem and unfortunately for a lot of people it doesn't feel like these issues are getting any better.

5:46We've been having these same conversations, you know, really since the Brexit conversation. So it's been, you know, almost 10 years that the industry has been suffering. And we haven't really seen any real change from government policy to help hospitality operators. It's been little bits of help, which have been very welcome. But, you know, what we want is that, you know, this industry is future-proofed. And these businesses are what our city centres and, you know, and streets are about these days. Retail is pretty much left the high street now. You know, when you go to when you go to city centres, you know, or secondary towns and cities, it is all about the hospitality offering and the leisure offering.

6:31So it is really, really dire at the moment. And, you know, we are hoping that things will change, but we need help. remarkable thing to say. I know it's all relative to how things were in the day. The retail has almost left the high street. Of course, many people will see lots of retailers there, but compared to what the high street was all about those decades ago, and we're beginning a sense of that. I've got Lindsay James with me on the show this morning as well, investment strategist at Quilter. Morning, Lindsay. Morning, Thorne. We've been hearing a bit this week, listeners getting in touch about a variety of things, but the state of the high street and what is going on on the high street has been one of the running themes, whatever story almost it feels like we've been talking about in the last few days.

7:14Why is it in recent times, as Ian describes there, that there isn't enough money coming through the doors of those in our hospitality industry? Well, I think, you know, we talked a lot about the cost side of things and they faced a perfect storm. But at the same time, they've had that challenge. We've seen changing tastes in the UK. And you can really see, you know, the difference in the younger generation to the older generation in terms of, you know, they're choosing earlier nights out. They're maybe a bit more purposeful in their nights out. So themed bars, themed experiences doing well, traditional nightclubs and pubs, not so much.

7:49So they're looking for really quite a different lifestyle. I think it just takes quite a bit of time for an industry to change and shift. And a lot of these smaller businesses, there's just no fat to cut out of them anymore. They haven't really got sort of the time to kind of rethink their business in that way. Bigger businesses maybe can be a bit more flexible just because they've got that opportunity there, but definitely difficult. Yeah. And how quickly have those tastes changed from your customer base that you would have had over the years? Yeah, I agree 100 percent with that, actually. You know, part of it is the economic setup that kind of we were left with after COVID.

8:27But actually, what happened after that, there was a big shift. I mean, I've got three bars and restaurants that are in the business district in Liverpool. And the pattern of people going out, you know, not just the young people, but people that traditionally would have Friday nights in a business district environment was always the busiest night of the week. Now it's complete. No one goes into work on a Friday. That changes people going out for lunch. people um you know when i mentioned not enough money coming through the doors it also is that you know it is the frequency of visits as well so when money is a little bit tighter people tend to uh look for hospitality not as something they do every day but something that's a treat so people you know go out for a special dinner or even if it's with colleagues at work where you might decide you know perhaps 15 20 years ago you might be going to the pub every lunchtime or or at least two or three times a week and now that might be a couple of times a month so it is very different from where we were five or ten years ago.

9:28Do you travel around around the world at all Ian or hear how it might be going in other cities around the world where it is working you know that the the customers may well have had very similar changes in habits but yet there is something that is vibrant and consistently vibrant across a country elsewhere. Well listen so you know as much as what i've said already the fact is is that hospitality um our nighttime sector um in most cities okay you can you know it's always been brutal you know i've worked in nightclubs at the you know the around the turn of the millennium things and and you know it's always been something that's moved fast you've had to adapt to change very very quickly um and it's something that never ever stays the same even pub going you know um uh you know what people are going to pubs and stuff for are completely different from what they might have been doing five or ten years ago uh the experience industry now is is what's fueling you know night times not necessarily dancing and drinking so people going and playing you know not just even just quiz nights but kind of you know shuffleboard pub games darts all these things that kind of basically have reinvented um uh leisure industry not you know not just for people that would have been there first time around but actually these are new people that are entering the industry but i think the uk is incredibly uh innovative and creative when it comes to moving quickly where where cultural fads and changes are so you know when you do go into cities or are comparable cities and you know in europe um the major cities still do feel very very vibrant and you know i don't want to be a you know a complete doom monger and say that everything is is absolutely in ruins but it's not but we do have to be protective of what the future is and you know as we've seen already that it is very very fragile for those operators and there does need to be government intervention that this now becomes not just a folly for us in business that we just think we do it because we love it or we do it because we're passionate about it it's got to be seen as a realistic business proposal that can stand on its own two feet otherwise there won't be an industry in decades to come and that you know the the shops and the high streets that I talked about before which were already dying, they have been repurposed as leisure destinations, but you need hospitality front and centre for those.

11:49When we see that the government made that announcement of a 15 % discount on business rates for pubs and music venues to come in in April, after much concern about how business rates were changing for so many pubs and music venues, will that help? Is that helping to calm nerves a little bit? Is 2026 looking, feeling any better than 2025? Well, listen, I think all help is welcome. I do think we were told and promised, actually, that the whole business rates mechanism would be completely re-looked at. You know, there was a fresh approach to how bricks and mortar businesses are charged compared to a lot of other businesses that are, you know, particularly new businesses now which don't rely upon all the overhead that bricks and mortar has.

12:43You're talking online businesses? Yeah, I mean, pretty much most of retail is done online these days. And it does feel that bricks and mortar businesses are disproportionately punished. I had a councillor in Liverpool who told me, this was just after COVID, and said that 70 % of all business rates in the city are played by hospitality venues. And that's where you see how huge it is. And I do get the problem, where is that money going to come from or be replaced from? Do you feel like something changed where there was at some point a plan? Maybe you were hearing some of these promises. Promises, I don't know if that's too strong a word, about how business rates might change, how we might raise money from businesses in the UK and the weight of that coming from online businesses.

13:38Has that changed? Well, I mean, again, there was definitely conversations that were happened. And I don't think it was a manifesto pledge, but it was certainly talked about a lot when the new government came in. And there was obviously, you know, there was, what do they call it? Not the California tax, but it was a tax, you know, against the big tech guy. Part of the Online Services Act. Yeah, that maybe could be redistributed a bit more fairly to councils instead of the pressure being the bricks and mortar businesses. We are the people that are employing the local people. We are putting back into the local community, but unfortunately when you see most people buying, most of the disposable income is going online, whether it be Amazon or clothes shopping and things like that.

14:28it is a real problem that to me feels part of the you know i don't get the count you know i don't sorry i do understand that councils are strapped for cash i mean that's purely evident but we've got to look at a new system to be able to tax fairly and and you know it's been said before as well about the vat rate for hospitality if you compare that with uh any of our european counterparts i think spain is nine percent but their top rate is 20 or 21 um uh ireland i think of 12 or 13 percent you know so they're 2020 equal equal so if you're like me and you serve food uh obviously supermarkets don't um charge vat on food but we do because we uh we heat it up and people can eat it inside so so effectively um it is huge we are hugely disrupt um disproportionately um you know against our european neighbors where you go if you look at what works hospitality works in those cities, right?

15:27You know, and start to unpick that. Well, the VAT rate for hospitalities is half, you know, what we're paying now. And that's a big chunk of change. So whether, you know, to be very, very brutal, we need, you know, more money and our overheads need to be less because at the moment the books don't balance. Whether that comes from VAT or business rates reform, something has to be done. I just want to ask Lindsay. I'm very grateful for that. Yeah, and Lindsay, quite often, you know, I just think back to the budgets of recent years when we broaden the conversation about what decisions should be made.

16:01We get a lot of people getting in touch and wake up to money saying, you know, the taxes for those online companies, the big tech giants globally. We see them making billions of pounds of profits every year, but also investing billions and billions as we are at the minute. And people see that as a way to make the system fairer. Did something change there, Lindsay? In those discussions we've had with Donald Trump and trade agreements and what Donald Trump wants the UK to be doing, have we taken our sort of foot off the pedal a little bit in terms of wanting to tax those companies in a bit of a different way and tax them more and take the burden off those with bricks and mortar and many people employed as in the hospitality industry?

16:45Well, there's two strands to it. I think the first is that the online companies, which are, as you say, typically American, are very, very good at creating business models which minimize their tax contribution legally in the UK. So that's the first challenge. The second challenge is that it's often seen as part of an important part of a bigger trade negotiation. And the U.S. recognizes the value of those companies to the U.S. economy and also wants to give them some kind of protection when they're operating in Europe. So it tends to be, you know, you get the promise in a manifesto of we're going to tax them more aggressively.

17:26They're going to pay their fair share. And then the reality is that, you know, those promises have to fall by the wayside, partly because of the business model of those companies and partly because of the wider picture when it comes to trade. 85058 do let me know what you're thinking this morning John in Bermondsey has been in touch in South London says my son is a bar manager of a pub in Rotherhithe he says they've just had a record January packed nearly every night they're hugely creative with the entertainment they offer and they're the only non-Weatherspoons John says pub in London that have a price cap of£5 a pint maybe pubs need to look at their business model and what they're offering punters something in that Ian?

18:08Yeah, absolutely. I mean, you've got to stay completely with your ear to the ground and you've got to constantly innovate. I was telling someone the other day that everyone always used to think that the hard work was getting the bar open, or the hard work is keeping it open. You know, you've got to constantly, constantly be looking at trends and how to innovate and how to, you know, differentiate yourself to everybody else that's in your locality, whether that is chains or whether that's independence. So absolutely. More messages coming in on this. there needs to be a rethink on the entire pub model.

18:37Lease hold erodes margin, doesn't allow owner-operators to be successful. Either the owners of the lease need to take responsibility or, my recommendation, need to be freehold. Just explain that a little bit more, Ian, what the logic behind that might be. Yeah, it's quite complicated, particularly for traditional pubs. You've got often a brewery model which is there, which generally you are paying more for your beer than what you could get on the on the open market if you went to a regular distributor and that's seen essentially because generally you get a preferred rent but often that as a comparable to open market rent doesn't really stack up so again it is slightly different to retail but again you're free of Thai pubs um generally people would buy leases not freeholds particularly in um in city centers um which means that again you're at the mercy of of rent hikes uh often you're punished for doing well uh if the area starts to do well around you from business that you've created and other places open up uh at your next rent review it tends to only go one way so uh if you own the bricks and mortar itself obviously you do benefit from uh the rising cut the you know the rising value of the building and And that obviously, you know, if you've got one or two pubs, that then becomes your pension or your equity or something you can tap into at a later stage.

19:59Thank you so much for all the messages. Do keep them coming. State of the high streets is another aside from the ever increasing cost. Parking is often almost impossible or hugely expensive. So guess what? People drive to out of town retail parks instead. Who'd have thought it? Most same people. Most people don't want or literally can't go shopping and then have to carry heavy bags to a bus or train. Why is it so hard for the anti-car brigade to understand that? Others talking about, you know, what is a night out, an evening out these days? Beer is not as important as it used to be. He says, well, we need stimulation, not just getting drunk.

20:31Bars are not as friendly as pubs used to be. Anything about that, Ian? I see there's a few messages. We're going to be talking more later about streaming and what's going on in that world, another subscription service on its way. Somebody saying, you know, it's harder these days. Anne's been saying everyone is so tired and stressed. Digital tech dominates everything. turn off the digital switch. Has there been a change in how people behave in these places that has changed the atmospheres? Well, there definitely is. Your competition isn't necessarily the bar around the corner. It's Netflix and chill as your competition.

21:09You know, as I mentioned before, people are going out less and stuff to do in the home is as much as your competition. so you know and that all takes um you know a bite out of the budget as well you know the subscription services people ordering in food people you know doing stuff within the within the home which they would have done um at uh pubs bars clubs cafes beforehand but it is slightly strange actually that there is something in that that actually you know codes of conduct within within hospitality venues sometimes you know can be a little bit odd or there's certainly kind of patterns emerging there's a really funny thing where where uh that's happening online at the moment where people are taking pictures of people queuing for the bar in single file which which that has been a post-covid trend uh where you know we all remember back in the day if you want to get served you're all hustling and bustling at the bar and and people you know waving money at you and cards and this that and the other and hoping to catch somebody's eye but people are queuing single file through a venue and sometimes out the door to order at the bar, which is very, very odd.

22:16Yeah, I popped in a pub in central Manchester not too long ago where there was just a huge sign right next to the bar saying no single file queuing allowed because it causes problems. It makes it very easy to serve, I have to say. I bet. And also if you're canny, you take the wrath of all of those in that long queue, you can get straight to the bar and you're away. It's fair. Yeah. And it's fair to do it. More messages coming in. Joe, the trucker, capped at£5 a pint in response to that pub that we heard about in Rotherhithe. He says, therein lies the problem. Shows how long it's been since I've been on a night out.

22:49I think, Joe, you're surprised there at the high levels of£5 a pint. Many might be thinking, blimey, I'll take£5 if I can find a price of that. Do keep your messages coming, 85058. There's plenty more for us to get through about why our night-time economy is the way it is at the moment. 85058. We'll be talking more about small businesses more widely as well and see how hospitality falls into all that. Let's have a look at this one. The government says it's irresponsible and potentially dangerous for tanning companies to claim some beds offer health benefits. It's after the BBC identified hundreds of adverts on social media sites saying the beds can reduce fatigue, help weight loss and treat mental health conditions.

23:34Our health reporter Jim Reid has more details. The sunbed industry has been changing as more salons open on high streets across the country and advertising has moved to social media sites like TikTok, Instagram and Facebook as firms target the next generation of customers. Tanning beds get such a bad reputation online. First day, people think it's dangerous. They're wrong. This winter, though, those ads are often not just about tanning but other supposed health benefits. I'm freezing cold and I need some vitamin D, so I'm here to get on the sunbeds. The BBC has been looking into this. We found hundreds of misleading videos online claiming sunbeds can reduce tiredness, treat conditions like eczema and acne and even stop you getting colds and flu.

24:19A sunbed exposes you to UV lights, which helps to balance your vitamin D levels and triggers feel-good chemicals such as serotonin. I posted this bit. But none of those videos explain the potential health risks. 27-year-old Sam T also posts on social media, but about his cancer diagnosis. Basically, I had a pink dot on my forehead. Sam did use sunbeds, though he can never know if they caused his skin cancer. He's now on the waiting list for surgery. What do you make of some of the information that's out there on things like TikTok and social media? Very misguided, misconstrued, whatever word you want to say.

24:53A lot of people as well commented on the video saying sunbeds are healthy for you, vitamin D. it's UV damage at the end of the day. And the advertising watchdog has been cracking down. Over the last six months, it's banned online ads from six different tanning firms for claiming sunbeds have health benefits or are safe. Cancer charities and doctors say the younger you startle a sunbed, the higher the risk of skin cancer. Hi, my name's Rosie Vare from Teenage Cancer Trust. A lot of the information that's out there is going largely unchecked and unregulated, and we would encourage people to think about where your information is coming from and who is creating this information and whether you can trust them.

25:28Gary Lipman is the chair of the Sunbed Association, which represents around half the salons in the UK. Our members are there to sell a tan and we don't encourage them to make health claims. Nevertheless, modern science is showing that there are health benefits of increasing your levels of UV exposure within safe levels. But many doctors, many other scientists would say there is no safe way to use a sunbed. Wholly untrue. Of course there's a safe way to use a sunbed, which is why there's a standard on the output of sunbeds and the number of sessions is being controlled. The advertising watchdog now says new guidelines for the sunbed industry will be published next month as it tries to better protect young customers in the online world.

26:15That's Josh, Josh Reid, that's Jim Reid reporting. Wake Up To Money with Sean Farrington. Good morning to you. It is Wake Up To Money on BBC Five Live on this Wednesday morning, the 11th of February. Thank you for all your messages about the hospitality industry. Lots getting in touch. Davey's just been in touch saying my nearest high street. A mix of nail bars, salons, bookmakers, fake shops, occasional craigs, he says, charity shops, a few pubs. The rest of the units are shuttered up. The only thing missing is tumbleweed, he says. I made the mistake a few weeks before Christmas of going out there on a retirement do.

26:52and that is a vibe that has been relayed by many people who are getting in touch this morning. I wonder if you're seeing, you know, we've had Rotherhithe and hearing the pubs have been full in Rotherhithe. Matt says, whoever got in touch, who was it? John in Bermondsey got in touch saying, can you name that pub? I live in Rotherhithe and play a lot more at my local, says Matt. £5 a pint capped at that bar, said John before. Somebody saying on the subject of queuing at bars, Alan says, train the bar staff. Single line queues are a product of bar staff. No longer train to scan a crowded bar properly instead of stupidly saying, who's next to a bunch of frustrated punters?

27:33Well, we've got Ian Hoskins here with us this morning, who is the boss of Mar Group, which runs pubs, Mar Pub Group, which runs many pubs and restaurants across Liverpool, as we've been hearing this morning. Ian are there different skills to being behind the bar these days where were some lost during those Covid years where we had to queue so often well I always think way way more rather than less because I mean these days the categories of drinks that you have I mean in our place you can you know with one round you might be making a cocktail making a cup of coffee pouring a pint you know a spirit and mixer you know these are all things that you know literally you've got to be a completely ambidextrous and and uh as well as all the you know the service skills that you've got to have as well so yeah i think there's actually more skills required than than ever working behind a bar or working in a bar or restaurant you know allergens all these things that you know years ago that people just didn't you know take take any any notice of so you know i think you know all credit to uh to the staff working because it's it's a hard job and it's a lot to learn it takes months and months and months to learn how to work behind the bar um properly um so um so yeah i mean yeah we can all have a laugh about the the the stuff at the you know at the at the bar and stuff but um um i have to say you know one thing about that is that we've never ever encouraged people to single people have just literally come in and started queuing but you know so it is as i say It's this weird thing that just seems to have happened since COVID and just a politeness, I think, that perhaps has come back.

29:13Oh, people used to doing that in retail where they haven't done that in hospitality before. And it only takes two people to form a queue, doesn't it? Exactly, and then they all do it, yeah. It's right out the door. Right, well, this is the hospitality industry that we've been talking about so much. I'll wake up to money this morning so far, as many in that industry, particularly the nighttime economy, gather in Liverpool today to talk about plenty of those issues. More widely, small businesses currently operating under pressures comparable to those experienced during the pandemic. That's what the House of Commons Business and Trade Committee said in a report that's out this morning.

29:48Business rates, energy costs, late payments were flagged up as key pressure points for small and medium-sized businesses in the report, which concluded that the existing pressure on small businesses is structural and self-reinforcing. I've got James Somerville with us, who is a managing director and co-owner of Bowers & Jones, which makes components for metal rolling mills in the black country. Jane, good morning. Thank you for joining us. Good morning. Jane, when we say you're a small and medium-sized business yourself, how big are you? How many staff have you got? Yeah, we've got 18 staff, about 5 million turnover, but we're predominantly an export business.

30:28We export almost 90 % of what we make. And that is a factor of the nature of our products. So we sell into the steel industry mainly. And the decline in the UK steel market has meant that the business over the years has had to find customers elsewhere. So that's why we now export with Europe and the US being our two major export markets. a lot of things are compared to the pandemic which was clearly a very very extreme scenario Jane you know that's putting it mildly if I think back to some of the things we were discussing on a daily basis on Wake Up To Money about what was happening in the world of business and to keep businesses going but do you remember what that was like during that time how that felt for you running your business and how that compares to now yeah well we actually went through a management buyout in the middle of the pandemic as well so myself and my business partners took the business over in July 2020, right in the middle of the lockdown.

31:28So it's etched in my brain what the pandemic was like. But what I would say is that that was only the sort of first hurdle we had to overcome. Since then, we've lost business in Russia, because of the Ukraine war, which then we had the energy increase of the prices in energy. I mean, I think our energy bill at the peak was four times what it normally was. And even now, although the energy prices have come back down, they're still double what they were before the Ukraine war, which I really don't understand. And then we've had, after that, we had Brexit, which brought in a whole load of challenges and hurdles to overcome with just paperwork and procedures and changes to documentation and whatnot.