Hospitality operators across Britain are reducing opening hours and closing at least one day a week as soaring wage costs and higher employer taxes increase operating expenses. Employers' National Insurance contributions rose by £25 billion and the minimum wage increased in April, pushing labour costs higher. Seventy-three per cent of businesses report under six months of cash reserves and one in five have no reserves. Seventy-nine per cent have raised customer prices, more than half have cut staff, and many are reducing hours. UKHospitality estimates £3.4 billion in added costs and 84,000 job losses since last autumn's Budget, while vacancies have fallen.
Hospitality businesses across Britain are being forced to shut their doors at least one day a week as soaring wage costs and higher taxes pile pressure on the sector. A new survey by leading trade bodies found that almost three quarters of pubs, restaurants and cafes were operating at or below 85 per cent of their normal capacity, with many cutting back opening hours in a scramble to save cash.
The survey, carried out by the British Institute of Innkeeping, the British Beer & Pub Association, UKHospitality and Hospitality Ulster, revealed that 73 per cent of businesses had less than six months of cash reserves, while one in five had none at all. To offset the new costs, 79 per cent of businesses said they had raised prices for customers, more than half had cut staff numbers, and many were reducing operating hours.
According to UKHospitality, Reeves's tax raid has added £3.4 billion in costs to the sector, prompting 84,000 job losses since last year's autumn Budget. Andrew Griffith, the shadow business secretary, accused the Government of ignoring industry warnings: "The Government stubbornly ignored clear warnings about the jobs tax and state-imposed wage rises from hospitality businesses because Reeves thought she knew better. Now, instead of a roaring summer trade, businesses can't afford the staff they need and are watching their cash reserves fade faster than a tan after a holiday."
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