UKHospitality says that the Government’s failure to address changing employer National Insurance Contributions (NICs) will stifle employment in critical sectors like hospitality.
It had been hoped that the Chancellor would make amendments to the measures she set out in her Autumn statement, which included a rise in NICs and a cut in business rates support.
The trade body describes the Government as not having a clear growth plan, which it says puts high street jobs at risk and is calling on it to urgently bring forward a plan that ‘allows hospitality to unlock growth and jobs, for everyone, everywhere’.
“Growth won’t just happen without a plan. Today’s statement was yet another missed opportunity to avoid an April cliff edge which will level a devastating £3.4bn annual increase to the sector’s tax bill,” says UKHospitality chief executive Kate Nicholls.
“The Government’s own analysis shows the failure to address the employer NICs threshold will force businesses to freeze recruitment, reduce hours available for staff and reduce employment levels in the very sectors the Government needs to achieve its goal to get people off welfare.
“If the Government is serious about getting Britain working, it needs hospitality. When we were backed after the financial crash and the pandemic, we proved how we can help drive economic recovery.
“Our new research this week proves that hospitality and the foundation economy are essential to the Government’s plan to create jobs where they’re needed, not just in clusters in the South East.
“There is still time for the Chancellor to act and avert this disaster. Now is the time to back hospitality, delay the changes to employer NICs and work with us to bring forward a plan for the high street that can deliver socially productive growth and opportunities to get people back into work.”
The British Beer & Pub Association (BBPA) also described the Spring Statement as a missed opportunity that would stifle growth.
“The Spring Statement was the perfect chance to sow the seeds of growth, but Government missed the opportunity, has not listened to business, and we can now expect to see prices rise, jobs at risk, and growth downgraded,” says BBPA CEO Emma McClarkin said:
“For a Government whose mission is growth, there is an alarming lack of a plan to boost the economy, given they’ve buried brewers and pubs under mountains of regulations, rates, and taxes.
“Time is of the essence, so if Government truly wants to unlock growth and support jobs, they must reform business rates, deregulate, review the new chaotic and punishing EPR fees, and phase in employment costs.”
Losing confidence
Responding to the Chancellor’s statement, Stephen Montgomery, director of the Scottish Hospitality Group, says it does ‘absolutely nothing’ to support the hospitality sector in Scotland or across the UK.
“In fact, the Chancellor did not even mention the hospitality industry once in her statement despite speaking for more than half an hour,” he says.
“The reality is hospitality businesses up and down the country are facing a tax bombshell next week of nearly £3.5B, and the Chancellor of the Exchequer’s statement has done nothing to allay the danger of job losses and closures across the nation’s pubs, hotels, and restaurants.
“The hospitality sector is increasingly losing confidence in the Chancellor of the Exchequer – it will only be regained if she finally listens, acts and helps the hospitality industry to grow and thrive.
“Our door remains open for talks, and the Chancellor can still do the right thing, and reverse the NIC rise ahead of the April cliff edge.”