Trade body UKHospitality (UKH) has said a rumoured increase to employer national insurance contributions in the Budget later this month (October) would be a “tax on jobs”.
It comes as the latest data from the Office for National Statistics (ONS) showed there were currently 95,000 vacancies in the hospitality sector.
UKH chief executive Kate Nicholls said: “Vacancies in hospitality remain stubbornly high.
“The data clearly demonstrates the need for the Government to incentivise sectors like hospitality to create jobs and support employment.
Biggest business expense
“The rumoured increase to employer National Insurance contributions would do the opposite – a tax on jobs.
“An increase would particularly hammer sectors like hospitality, where staffing costs are the biggest business expense.”
On Tuesday 15 October, Prime Minister Keir Starmer side-stepped questions from the BBC regarding national insurance increases for employers.
Though the Labour party leader asserted the Government would maintain its pre-election manifesto pledge and not increase national insurance for workers.
“Hospitality businesses are much less able to stomach yet another cost increase, when they’re already managing increases in other areas like wages, food, drink and energy.
“But it is hospitality that is most likely to support people from economic inactivity back into the workforce”, the chief executive added.
Job creation
It comes as publicans last week told The Morning Advertiser (MA) they were already bracing themselves for further increases to the national living wage (NLW).
In addition, speaking at the MA Leaders Club event in Oxford earlier this month industry leaders said NLW rises had become one of the biggest challenges for the sector.
Moreover, the Employment Rights Bill, introduced in parliament last week, is set to have “major ramifications” for pubs when it comes into force, including the abolishment of zero hours contracts.
Nicholls continued: “If the Government is to achieve its plan for growth and getting more people into work, it should use the Budget to incentivise that. It should be looking to support job creation, as well as reducing the cost burden for businesses.
“For hospitality, that means no increases to employer national insurance contributions and action to avoid a billion-pound tax bill for venues when business rates relief is set to end in April.”
