The impact of the Budget on sectors like hospitality demonstrates the risks of focusing only on a small number of high economic productivity sectors UKHospitality has said.
In its response to the consultation on the strategy, UKHospitality called for the creation of a Foundation Economy Sector Council. The Council would ensure foundation sectors, like hospitality, can thrive and contribute to the success of the eight sectors identified in the Industrial Strategy.
Hospitality is essential in making the UK internationally competitive, evidenced1 by inbound investors listing ‘quality of life’ as a larger driver of investment location than the tax environment, regulation, or infrastructure. It also provides jobs and opportunities to people across the UK.
However, UKHospitality warned that policies which favour the eight prioritised sectors over the wider economy would risk the success of the strategy and limit its impact on the breadth of the UK.
It highlighted the regressive nature of the changes to employer National Insurance Contributions (NICs) in the Budget, which disproportionately impact hospitality but will have a comparatively minimal impact on larger sectors the strategy is built around, like financial services.
Allen Simpson, Deputy Chief Executive of UKHospitality, said:
“The focus on only eight high economic productivity sectors, in only some parts of the UK, risks meaning that the majority of the people in the country are shut out. We saw from the impact of the Budget on lower earners what happens when we forget the everyday economy.”
“It also risks the success of the strategy itself. Investors tell us that quality of life is a bigger driver of investment decisions than anything like tax or regulation. To put it simply, companies want good pubs, good restaurants, good coffee and good places to live. Hospitality delivers that.”
“That’s why a Foundation Economy Sector Council is crucial to retain that focus and utilise hospitality’s ability to create places where people want to live, work and invest.”
