UK Hospitality Sector Faces Employment Decline Following Budget Changes

Employment in the UK hospitality sector has declined for 13 consecutive months, with recent data showing 170,000 fewer people on payroll compared to pre-Budget figures.

The hospitality sector is experiencing a significant decline in employment, with the latest data from the Office for National Statistics (ONS) indicating that 170,000 fewer individuals are on payroll compared to the period before the last Budget. Over the past two months alone, the sector has seen a reduction of 64,000 jobs.

This trend highlights the ongoing impact of last year’s Budget measures, which have disproportionately affected the hospitality industry. The sector accounts for more than half of all job losses across the economy during this period. In response to these challenges, businesses within the industry are reportedly reducing operating hours, cancelling planned investments, raising prices, and in some cases, closing operations entirely.

One of the key factors contributing to the decline is the change in employer National Insurance Contributions (NICs) thresholds introduced in the last Budget. These changes have particularly affected those in part-time and flexible work arrangements, which are prevalent in the hospitality sector.

The scale of job losses has prompted UKHospitality to call for immediate government action in the upcoming Budget. The organization is advocating for measures such as lowering business rates, adjusting NICs, and reducing VAT to help mitigate the impact on the sector. These proposed changes aim to restore confidence, protect existing jobs, and support the industry’s recovery.

The situation underscores the broader economic challenges facing the hospitality sector, which has historically been a significant provider of employment opportunities. The upcoming Budget presents an opportunity for policymakers to address these issues and support the sector’s recovery efforts.