UK hospitality accounts for more than half of all job losses since the Budget

New analysis from UKHospitality shows that hospitality has borne the brunt of tax-driven job cuts since the last Budget, with the sector accounting for more than half of all UK redundancies. The warning comes as summer trading falters and leading operators call for urgent reform.

Hospitality has suffered almost 89,000 job losses since last October’s Budget, accounting for 53% of all redundancies across the UK, according to new analysis of labour market data by UKHospitality.

The figure means more than half of the 164,641 jobs lost nationwide have come from pubs, bars, restaurants and hotels. This equates to one in 25 roles in the sector disappearing, or 4.1% of its entire workforce, as per UKHospitality’s report.

Scale far worse than predicted

The Office for Budget Responsibility had forecast around 50,000 job losses as a direct result of changes to employer National Insurance Contributions (NICs). The actual toll is nearly three times higher, confirming what Kate Nicholls, chair of UKHospitality, described as “staggering” levels of damage.

The trade body said the disproportionate impact reflects the regressive nature of NIC changes, particularly the lowering of the threshold, which penalises part-time and flexible employment. Job losses in hospitality, relative to the size of its workforce, are seven times greater than across the wider UK economy.

Calls for urgent government action

“The number of job losses suffered in hospitality since the Budget is staggering,” Nicholls said. “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. 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.”

UKHospitality is calling for reforms to business rates, NICs and VAT in this autumn’s Budget to “reverse the damage done by increased taxes” and prevent further job losses.

Summer trading slowdown deepens pressures

The stark jobs analysis comes as the sector grapples with what The Oxford Partnership has described as “one of the toughest mid-summer trading environments in years.”

According to the group’s Market Watch data, compiled with Vianet, licensed outlet numbers fell by almost 1% in July compared to the same month last year, with London closure rates running at double the national average, as reported by the drinks business.

Despite spells of hot weather, trading momentum “failed to materialise,” said Alison Jordan, chief executive of The Oxford Partnership. “The data shows the sector is under sustained pressure and the combination of rising costs, slowing spend, and declining volumes is creating one of the toughest mid-summer trading environments we have seen in years.”

Consumers consolidating visits

While average dwell times rose 13% year-on-year in July, suggesting customers are staying longer when they do go out, footfall fell and spend growth slowed markedly. Year-to-date, drinks sales growth has eased to 3.9% and food to 5%, but in the most recent 12 weeks, drinks spend was up only 1.8% and food 1.9%, both lagging the Consumer Prices Index at 3.6%.

This means pubs and restaurants are seeing a decline in spend per head, further eroding margins. Draught beer and cider volumes are down 2.4% year-to-date, with sharper drops in recent weeks. London has been the weakest region, down 6.4% in the past month.

Rising closures and administrations

Economic pressures continue to weigh heavily on operators, with the British Beer and Pub Association predicting the loss of one pub per day this year. BrewDog announced the closure of 10 sites in August, while cocktail chain Simmons and pub group Oakman Inns both entered administration.

The combination of unprecedented job losses, rising costs and a sharp slowdown in consumer spending highlights the precarious state of hospitality. UKHospitality’s warning that the sector is being “taxed out of existence” echoes mounting evidence of structural fragility.

Related news

Reeves accused of ‘smoke and mirrors’ over hospitality tax rises

Hospitality must sell 29.5 million extra pints a day to cover Budget

'All five multipliers must now be shown' as hospitality sector braces for Budget