London restaurants move capital to Gulf

James Robson, co-owner of Fallow in St James's Market, signed a deal to open a Gulf outpost this week. Robson attributes the move to a "tax tsunami" in the United Kingdom and a stronger work ethic in the Middle East. Fallow serves 1,000 customers daily and has accumulated 650,000 Instagram followers through dishes like a whole cod's head in spicy butter sauce. The restaurant is widely regarded as the capital's most in-demand dining destination.

Other London dining groups have already established a presence in the region. Scott's of Mayfair opened in Dubai, as did the two Michelin-starred Indian restaurant Gymkhana and the Chinese venue Park Chinois. The Borough Market bakery Bread Ahead also expanded there, while Isabel's, a Mayfair establishment popular with politicians, opened in Abu Dhabi. These openings occurred despite regional conflict, including the US-Israeli war in Iran earlier this year, which caused bombardment in Dubai and an exodus of expats. Dinner by Heston remains temporarily closed due to the fallout, and the Michelin guide faced criticism in October for listing 16 closed restaurants based on early-year inspections.

Robson identified East Asia, the United States, and the Gulf as primary growth targets during a conversation from Hong Kong. He noted that America supports business, the Gulf provides active assistance, and East Asia maintains a work ethic and tax system that contrasts sharply with the UK. Hospitality VAT is the central financial complaint, with the UK rate at 20%, among the highest in Europe where the restaurant average is about 12%. Italy charges 10% on food sold in restaurants. Chefs are urging Chancellor Andy Burnham to reduce the rate in next week's budget.

Robson stated that the UK "sleepwalked into multiple anti-growth taxations" over the last two budgets and expects further measures next week. He cited 25% corporation tax and dividend tax rates of 40% or more as additional pressures. Michelin-starred chef Jason Atherton now spends one-third of his time at his Dubai restaurant, stating that profit margins are easier to achieve there than in London. Robson said he does not resent paying UK tax but argued that the risk and reward balance for domestic growth is no longer sensible, leading him to focus expansion overseas.

Human rights groups have called for caution regarding these expansions. Felix Jakens, director of campaigns at Amnesty International UK, said the UAE has a poor record on worker rights and protection from labour exploitation. He noted that the UAE's heavy spending on its UK image, including through Manchester City, should not obscure how workers are treated. Migrant workers, who make up the majority of the UAE's population, are bound by a sponsorship system that ties them to employers and denies them the right to form trade unions.

Jakens argued that any UK business expanding into the Gulf must conduct proper human rights due diligence. This ensures kitchen staff are treated fairly, paid properly, and can raise concerns without fearing loss of employment or visa status. The next scheduled step for Robson and other London operators is the UK budget announcement next week, where changes to hospitality VAT are expected to be debated.