Unemployment rates in the UK hit 5% in the three months to September, the highest rate since 2021, the latest figures from the Office for National Statistics (ONS) showed.
There were 170,000 fewer people on payroll compared to the period before the previous Budget, with 64,000 jobs lost in the past two months alone, according to the data.
Average wage growth was also down, dropping from 4.7% to 4.6% over the three months to August.
Shocking indictment
Hospitality has been disproportionately hit since the changes to employer National Insurance contributions, one trade body said, with more than half of all job losses since coming from the sector.
The consequences of this extend beyond employment, with businesses reducing hours, cancelling investment, raising prices or closing their doors altogether, UKHospitality (UKH) explained.
Chair Kate Nicholls said: “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.
“Hospitality has borne the brunt of these changes. 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.”
To reverse the damage and restore confidence, the trade body urged the Government to lower business rates, cut VAT and fix NICs in the upcoming autumn Budget.
Deeply concerning
Meanwhile, Night-Time Industries Association (NTIA) CEO Michael Kill described the figures as “deeply concerning”.
He continued: “[These numbers] are a stark signal the Government’s current approach is failing to support job - particularly in sectors like hospitality, leisure, and night-time industries.
“Economists have long warned April’s £25bn hike in employer National Insurance contributions would squeeze firms’ payrolls and stall hiring, and these numbers confirm their fears.
“The Government must recognise these policy choices are not neutral, they have real consequences for employment. Increasing taxation on businesses during a slowdown risks further job losses and threatens the recovery of the sectors that employ millions of workers.”
Kill further warned more tax rises in the upcoming Budget would only exacerbate the problem: “We urge policymakers to reconsider the trajectory of taxation on businesses and to take a measured approach that protects jobs, supports growth, and allows the UK’s economy - and its workforce - to thrive.”
