In a letter to the Prime Minister, trade body UKHospitality (UKH) states that the 2024 budget directly contributed to a reversal in the hospitality sector’s ability to create jobs.

The sector lost 69,000 jobs between October 2024 and May 2025. During the same period the previous year, the hospitality sector created an additional 18,000 jobs.

UKH adds that this year’s budget should explicitly aim to reverse the hospitality job losses of the last few months.

The letter also calls for the government to fix employer National Insurance Contributions (NICs) to boost jobs by extending the existing exemptions to include both young people and people moving from welfare to work.

In the run-up to the budget, UKH is also calling for:

• Lower business rates to revive high streets, through the maximum discount of 20p for hospitality businesses as part of the promised business rates reform.
• Cut VAT on hospitality to drive investment by following the majority of European rival nations by reducing VAT on the sector.

Speaking about the proposals, UKH chair Kate Nicholls comments:

“In the years following the financial crisis, we created one in five net new jobs and today employ 3.5 million people. The government needs sectors like hospitality to create jobs and meet their ambition to get more people back into work. 

 

“We have a proven track record of being able to deliver those jobs in every part of the country and for people from all backgrounds. 

 

“The NICs change was socially regressive and had a disproportionate effect on entry-level jobs. Without a change of tack from the government we could be looking at over 150,000 fewer workers in hospitality, when we should be bringing people into the jobs market.

 

“The economy needs jobs – hospitality creates them, but we are being taxed out.”