Cafe chain shuts down after 60 years as Labour's tax hikes force another firm out of business

By ELIZABETH HAIGH, SENIOR NEWS REPORTER Published: 14:44, 28 July 2026 | Updated: 14:54, 28 July 2026 A popular cafe chain has shut down after 60 years blaming Labour policy and running costs, becoming the latest casualty of government tax hikes. Merrie England, a West Yorkshire chain with six branches in Huddersfield, Halifax and Brighouse, announced this morning that all would close their doors with immediate effect. The popular cafes, which were bought up by businessman Gary Conway and a team of investors in 2024 after being in the same family for 58 years, have closed their doors due to 'rising costs' and 'government policy'. In a statement shared on its website, the firm said: 'This has been an incredibly difficult decision, reached after facing a sustained increase in the cost of goods, business rates, energy costs, and the wider rising costs associated with staffing and government policy.  'Alongside these pressures, we have also seen a reduction in footfall and customer spending, with many people understandably unable or unwilling to pay the prices that businesses now need to charge in order to survive.' Having been founded in 1966 by Keith and Anita Hanselman, the firm had grown to have 84 employees at the time of the takeover, who are now all thought to have been laid off. The firm added it wishes 'all our customers, friends, staff, and suppliers the very best for the future' and said it was 'grateful to have been part of the community so long'.  Merrie England was well known for its 'olde worlde' charm and hot beef sandwiches, and became one of the first cafes in the UK to offer a drive-thru option in 1980. Merrie England, a West Yorkshire chain with six branches in Huddersfield, Halifax and Brighouse, announced this morning that all would close their doors with immediate effect Having been founded in 1966 by Keith and Anita Hanselman, the firm had grown to have 84 employees at the time of the takeover, who are now all thought to have been laid off Poet Laureate Simon Armitage even wrote a poem addressed to 'the Women of the Merrie England Coffee Houses, Huddersfield'. Residents took to social media to express disappointment over the closure, describing themselves as 'absolutely gutted' and 'incredibly sad'.  It is just the latest in a long line of businesses to shut up shop since Labour returned to power in July 2024. Policies introduced under Sir Keir Starmer and his chancellor Rachel Reeves such as hiking National Insurance rates and minimum wage costs for employers have been widely blamed by parts of the hospitality industry for increased pressures. Today Conservative MP Neil O'Brien blamed Labour for the closure on social media, writing: 'Labour have managed to kill Huddersfield's answer to Starbucks.' It comes after a near-100-year-old bakery chain announced its own closure on June 30 this year due to tax increases and spiking fuel prices. Coughlans bakery, owned by Sean Coughlan and comedian Romesh Ranganathan, went into voluntary liquidation earlier this month in a move to try and ensure staff and suppliers were paid as the firm went bust.  Mr Coughlan, who is also the managing director, said in a video shared online: 'Rates have absolutely smashed local businesses, local retail.' The company was hit by an extra weekly bill of £20,000, he explained, while the fuel bill alone doubled from £3,000 to £6,000 due to the crisis in the Middle East. Meanwhile, the UK's recent heatwave was the 'nail in the coffin' for the company's demise as stores suffered from a drop in business of 50 per cent, with customers rather choosing to dine-in. The decision to shut-up-shop had 'affected us more than we could have ever imagined,' he added. At the time Conservative MP Claire Coutinho joined the flock of fans taking to social media to post their upset over the news. Ms Coutinho, who is the shadow minister for women and equalities, shared the post, with the caption: 'Utterly, utterly heartbreaking. Coughlans Bakery was one of the BEST places locally for a sweet treat. 'So sad for Sean, Romesh and the whole team. Government must stop choking small businesses into extinction.' Larger corporations also blamed the government for a crisis in high street closures – including jewellery and accessory firm Claire's. After the brand went into administration in January, bosses pointed to 'highly adverse government fiscal policies' as well as high inflation and weak consumer confidence. Some 2,500 jobs were put at risk as a result of the move.  In March, William Hill also said it would be closing 200 of its high street branches over what it branded 'highly damaging' gambling tax increases. The bookmaker said 15 per cent of its outlets will shut within weeks in the latest blow for the British high street. The move came just months after Chancellor Rachel Reeves made the decision to almost double taxes on online gambling from 21 to 40 per cent, while hiking sports betting from 15 to 25 per cent. The company said 'increased cost pressures on the regulated sector including significant tax increases announced by the Government' were the cause. Another victim of Labour policy and tough economic conditions was a London restaurant hailed by the Michelin guide that announced it was forced to close its doors.  Margot Italian, in the heart of Covent Garden, cited difficult trading conditions and the impacts of Rachel Reeves' first Budget. Addressing 'dear friends and valued guests', their statement read: 'After much reflection, and as a result of the substantial business rate and national insurance cost increases imposed on us in this year's budget, we have made the difficult decision to close Margot. Our final day of service will be the 28th of June 2025.  'We are deeply grateful for the support, memories, and meals we've shared with this wonderful community. Thank you for allowing us to serve you. Your loyalty and encouragement have meant everything to us.'