New analysis of employment data by UKHospitality has revealed that hospitality has accounted for 53% of all job losses in the UK since the Budget, confirming the sector is the hardest hit by tax increases.
Of nearly 165,000 job losses since the 2024 Budget last October, almost 89,000 have been lost in hospitality.
The hospitality lobby group also found that the percentage of job losses in the sector, as a proportion of its total workforce, is seven times larger than the rate of the wider UK economy.
Hospitality jobs
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UKHospitality said its analysis is a further illustration of the negative nature of changes to employers’ national insurance contributions (NICs), particularly the lowering of the threshold at which the tax kicks in, which has directly hit part-time and flexible jobs.
Kate Nicholls, chair of UKHospitality, said: “The number of job losses suffered in hospitality since the Budget is staggering.
“More than half of all job losses since October occurring in hospitality is further evidence that our sector has been by far the hardest hit by the government’s regressive tax increases.
“The sheer scale of costs being placed upon hospitality has forced businesses to take agonisingly tough decisions to cut jobs – with part-time and flexible roles often those most at risk.”
In the 2024 Budget, chancellor Rachel Reeves raised the employer level of NICS from 13.8% to 15%. But she also lowered the level at which employers’ Class 1 NICs take effect from £9,100 to £5,000, further adding to the pay bill, especially for people in part-time and casual work. The changes took effect in April.
The scale of job losses is more than three times worse than estimated by the Office for Budget Responsibility, which predicted 50,000 job losses as a result of changes to employer NICs.
Nicholls added: “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.
“The government needs to recognise the devastating impact of its tax increases on working people and communities across the country. It should take action at the Budget to reverse this damage by lowering business rates, fixing NICs and cutting VAT.”
In addition to the changes to NICs, the 2024 Budget also confirmed a 6.7% increase in the national living wage to £12.21 per hour for people aged 21 and over, and a 16.3% rise in the national minimum wage for 18 to 20-year-olds to £10.00.
The Low Pay Commission’s central estimate for the national living wage from April 2026 is £12.71, a 4.1% increase. But the LPC is also remitted to converge the 18-20 NMW rate with the NLW, either by accelerating increases, by lowering the age threshold, or a combination of both.
Earlier this month, when the NLW estimate was announced, Nicholls said: “The ambition behind the national living wage is right – but the pace must be sustainable. We’re calling for the LPC to carefully consider wider economic challenges and employment impacts when recommending future increases.”
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