A survey by hospitality trade associations has revealed how the sector fears it will be drastically affected by new employment costs and the reduction in rates relief from April.
The figures reveal that:
- 70% will reduce their employment levels, risking job losses and lost income for workers
- 60% would cancel planned investment
- 29% will reduce trading hours
- 25% have no cash reserves left, up six percentage points since October 2024
- 15% believe they will have to close at least one site.
The British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster, and UKHospitality are highlighting the strong record the sector has in delivering economic growth. Hospitality was one of the top contributors to GDP growth in November and December 2024.
They said a delay to the changes to the employer National Insurance (NI) contributions threshold would avoid the immediate impact on jobs and investment revealed in the survey. Instead, it would allow hospitality to deliver economic growth further and faster.
When asked how the government could support the sector, businesses cited a reversal of employer NI contribution changes as the second biggest priority after a lower rate of VAT for hospitality.
“These figures should serve as a clear warning that pubs, brewers, and hospitality venues will be forced to make painful decisions to weather these new costs, which will have damaging impacts on businesses, jobs and communities,” said the organisations in a joint statement.
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“At a time when hospitality has been one of the top contributors to economic growth, the last thing the government should be doing is piling on costs that will impact employment and cut off our ability to grow.
“We want to work with government so we can continue to vitally boost the economy, which is why we urge them to delay the changes to the employer NICs threshold. This would help save jobs and allow the sector to continue on its growth path.”
They add: “If it doesn’t act, then businesses are clear that the impact on communities, employees, and supply chains will be significant. They have warned about potential lost earnings, lost jobs, reduced trading hours and, in some cases, business failure. This would mean the loss of essential community hubs that would otherwise drive the local economy and create jobs.
“Our message to government is to delay its changes to the employer NICs threshold and allow hospitality to continue to deliver economic growth, regenerate our high streets and support local communities.”
