Over half of all job losses in the UK since last October’s budget have occurred in the hospitality sector, which is grappling with escalating costs, new data reveals.
Out of the 164,641 job losses in the UK since the Budget last October, nearly 89,000 have been in the hospitality industry.
The extent of job losses is three times worse than the Office for Budget Responsibility’s estimate, which predicted 50,000 job losses as a direct result of changes to employer NICs.
Kate Nicholls, chair of UKHospitality, described the number of job losses as “staggering”.
“The sheer scale of costs being placed upon hospitality has forced businesses to make excruciatingly tough decisions to cut jobs – with part-time and flexible roles often those most at risk,” as reported by City AM.
“At a time when the country needs jobs, the Government should be encouraging hospitality to grow and create jobs, not tax them out of existence,” Ms Nicholls said.
Economists have warned the rise in the national living wage and the increasing levy and threshold for national insurance contributions for employers would disproportionately impact firms with lower-skilled, lower-paid workers who are often younger and in forms of flexible or part-time work.
Retail and construction firms, along with hospitality companies, also fit this profile.
Leading retailers wrote to the Chancellor last week calling for reform to the business rates system, which high street firms have long rallied against.
“Without reform, this system will continue to cost jobs, limit investment and push up prices for households everywhere,” said Helen Dickinson, chief executive at the British Retail Consortium.
Business rates are taxes levied on properties utilised as commercial venues, and are based on the potential rental market value of the property. Rates are set to rise next year, adding billions to businesses’ expenses.
Retailers, specifically, have argued the system puts high street shops at a disadvantage compared to online storefronts.
The letter, signed by more than 60 businesses, said: “Labour’s manifesto made a clear and welcome promise to deliver good jobs and higher living standards but if future policy decisions lead to rising prices and fewer jobs, then those commitments are at risk.
“As the chief executives of many of Britain’s leading brands, we are determined to help deliver your growth ambitions. However, for this to be possible, the conditions for stable prices, continued investment and sustainable employment must be at the heart of this year’s Budget.
“We see it as a key moment for the Government to publicly buy into retail and the vital role the industry can play in helping deliver a stronger and more resilient economy for all.”
