Budget changes will cost city restaurants Lunya and Lunyalita £106,000 a year

The executive chair of Liverpool restaurants Lunya and Lunyalita has revealed recent budget changes will cost them a staggering £106,000 more in bills every year.

The hike comes as Peter Kinsella, co-founder of Lunya and Lunyalita, which recently became an Employee Owned Trust business, and the rest of the city’s hospitality industry, continue to fight back after Covid.

He says it comes as a huge blow, with staffing levels already paired back to a minimum and many – including them – still paying off huge loans to stay afloat during the pandemic.

Unprepared to sacrifice on quality, it can only mean another increase in prices. He says: “We had hoped that they could stay stagnant or at least only go up by 1% or 2%.

“It now means we face increases of up to 6% or 8%.”

It also means, he adds, that work on the restaurants like redecorating and refurbishing the furniture, and purchasing a new oven, will have to be delayed with a knock on effect to local businesses they would have looked to buy from or work with.

But he says: “We are very lucky.

“We have an extremely loyal customer base. We could have gone bust in April 2020, but we didn’t because we had this enormous upsurge of targeted support from local people wanting to buy from us and keep us going. Their kindness kept us going.

“And I would say to them, and everyone in the city, we need that same support now.

“If you’re buying a restaurant voucher as a Christmas gift, going out for a festive meal or planning your work’s do, make a conscious decision, think carefully, and go local.

“Support your independents because the quality is there and you’re not just supporting them, you’re helping the whole of the city’s economy.”

The Autumn budget has introduced new pressures on the hospitality industry with a number of increases taking effect from April, including higher employer National Insurance contributions and an increase in the National Living Wage – although Peter supports the latter: “If anything it should be higher.

“You want to support a good workforce because you’re rewarded by loyalty and they’ll stay with you.

“Plus, it’s the right thing to do!”

The most surprising change, however, was the reduction in Business Rates Relief which has gone from 75% to 40%.

“That’s almost a 50% reduction,” says Peter. “We had expected that support to continue for longer.

“We are already paying back two Government-backed placebo loans which we had to take out during the pandemic to stay afloat. We borrowed £500,000 just to survive, and we’re about two years from paying that back.

“We are only a two-restaurant group, but we needed that to carry on trading in 2021 or we would have gone under. The impact was massive.

“The idea was that the rates relief would be a short to medium term measure while we gave back the loans. We would have expected, and hoped, that support would have stayed higher for longer.”

As he revealed it would mean the changes would lead to an increase in costs of £106,000 for Lunya and Lunyalita – which recently became an Employee Owned Trust business to rewards its workers and give them a stake in the business as Peter and co-founder wife Elaine begin retirement plans – Peter questioned the changes: “Money could have been raised in a different way.

“I’m no economist but if we were making £106,000 profit, we would be paying 25% of that into corporation tax – and if we were making a profit, I’d be prepared to pay more than 25%.

“When we make a profit it stays in the local economy. It goes to the HR person, our solicitor, our finance worker, the lady who cleans out the sanitary bins – they are all local people. It goes to our meat suppliers, our vegetable suppliers, who are all locally based. That money feeds through so it doesn’t just affect us. It’s a circle of support.”

He stressed again: “Christmas is our busiest time. So please, this Christmas, go local.

“All other independents will be the same. The support you gave us in Covid, we need now as much as ever.

“Liverpool is stronger over many other cities when it comes to independent bars and restaurants. We will give you a great experience – and you will help us and you will help the city itself.”