PM Warned Hospitality Is In Danger Of Being Taxed Out, As Sector Loses 69,000 Jobs Since Budget
The hospitality industry has lost 69,000 jobs since chancellor Rachel Reeves’s rise in employers’ national insurance contributions took effect, a bleak reversal from the 18,000 roles created in the same period last year.
The figures, sourced from the Office for National Statistics, or ONS, mark the sharpest peacetime job losses for the sector since records began outside the pandemic, and have triggered warnings that the government’s tax policies are putting a vital British industry at risk.
Job losses in the sector are three times higher than the rest of the economy since October 2024, says UKHospitality who have urged the Prime Minister to take action.
In a letter to the Prime Minister, UKHospitality said the 2024 Budget directly contributed to a reversal in hospitality’s ability to create jobs.
UKHospitality said this year’s Budget should explicitly aim to reverse the hospitality job losses of the last few months.
The letter called for the Government to fix NICs to boost jobs by extending the existing exemptions to include both young people and people moving from welfare to work.
In the run-up to the Budget, UKHospitality is also calling for the Government to:
- Lower business rates to revive high streets, through the maximum discount of 20p for hospitality businesses as part of the promised business rates reform.
- Cut VAT on hospitality to drive investment by following the majority of European rival nations by reducing VAT on the sector.
Speaking about the proposals, Kate Nicholls, Chair of UKHospitality, said:
“In the years following the financial crisis we created one in five net new jobs and today employ 3.5 million people. The Government needs sectors like hospitality to create jobs and meet their ambition to get more people back into work.
“We have a proven track record of being able to deliver those jobs in every part of the country and for people from all backgrounds.
“The NICs change was socially regressive and had a disproportionate effect on entry level jobs. Without a change of tack from the government we could be looking at over 150,000 fewer workers in hospitality, when we should be bringing people into the jobs market.
“The economy needs jobs. Hospitality creates them. But we are being taxed out.”