Tax increases in last autumn's budget coincided with almost 90,000 hospitality job losses over nine months. UK Hospitality's analysis shows more than half of economic job losses since October were in hospitality, with the ONS estimating about 165,000 positions lost since the budget. Economists warned that higher national living wage and increased employer National Insurance thresholds and levies would burden businesses with many lower-paid, part-time and flexible staff. The OBR had forecast roughly 50,000 job losses from the National Insurance rise, but the Bank of England says the impact has exceeded expectations, hitting hospitality hardest. Kate Nicholls called the scale "staggering" and urged VAT cuts and business rates reform.
Economists had warned that increases to the national living wage, alongside higher employer National Insurance thresholds and levies, would weigh most heavily on businesses with large numbers of lower-paid, part-time and flexible staff. These roles are common in hospitality, and often filled by younger workers, leaving the industry exposed to structural shifts in the labour market. The Office for Budget Responsibility had forecast that the National Insurance rise would eventually result in around 50,000 job losses.
"More than half of all job losses since October occurring in hospitality is further evidence that our sector has been by far the hardest hit by the government's regressive tax increases," Nicholls said. "The sheer scale of costs being placed upon hospitality has forced businesses to take agonisingly tough decisions to cut jobs, with part-time and flexible roles often those most at risk."
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