New ONS data shows 170,000 fewer people are on payroll in hospitality compared to the period before the Budget, with 64,000 jobs lost in just the past two months alone.
This sustained decline is unprecedented says UKHospitality, and highlights the social and economic damage caused by measures introduced last year.
Hospitality has been disproportionately hit, accounting for more than half of all job losses across the economy over that period. The consequences extend beyond employment – businesses are reducing hours, cancelling investment, raising prices and, in many cases, closing their doors altogether.
Last year’s Budget measures, particularly changes to employer National Insurance contribution (NIC) thresholds, have hit those in part-time and flexible work the hardest, undermining a sector that has a long and proud history of providing opportunity and employment to all.
This scale of job losses demands immediate action at the upcoming Budget, says the trade body. To reverse the damage and restore confidence, UKHospitality is urging the government to lower business rates, fix NICs, and cut VAT.
“Thirteen months of falling employment and 170,000 fewer people on payroll is a shocking indictment of the damage caused by last year’s Budget,” said Kate Nicholls, chair of UKHospitality.
“Hospitality has borne the brunt of these changes, with more than half of all job losses coming from our sector. If the government wants to get more people back into work and revitalise high streets, it needs hospitality firing on all cylinders, but right now we’re being taxed out.”
Steve Alton, chief executive of the British Institute of Innkeeping (BII), has written to the chancellor, calling for urgent action to support UK pubs and the vital role they play in communities and the economy.
The BII is calling on government to urgently act on the following priorities:
- VAT reform: Permanently reduce VAT on pub sales to 10%, boosting resilience, creating jobs, enabling investment, and minimising price rises for consumers.
- Business rates: Deliver permanent, real-terms reductions in business rates bills from April 2026.
- Employment incentives: Reverse recent NICs changes and introduce financial incentives for pubs hiring under-25s and those returning to work.
The BII’s member data shows that fair taxation would have immediate impact:
- 73% of pubs would increase investment
- 60% would increase staff hours
- 50% would increase their number of employees.
Alton said: “Since the Covid pandemic, government has recognised the huge value of our pubs, with the prime minister recently stating that ‘When our locals do well, our economy does, too’.
“This recognition must now be matched with urgent action at the Budget to drive local economic growth by reducing the unfair tax burden. This will create skilled jobs and allow pubs to continue to serve their communities. Without it, many simply will not survive.”
