UK | Leading UK hospitality leaders have outlined the potential damage of an increase to employment costs for businesses.
The leading hospitality bosses that sit on the UKHospitality board are warning of the unprecedented damage the rise to employment costs will inflict on the sector.
Kate Nicholls, Chief Executive of UKHospitality, and UKHospitality board members, which includes the bosses of Fuller’s, Stonegate Group and Whitbread, have written to the Chancellor, supported by a further 209 hospitality businesses, to outline the impacts the additional GBP £3.4 billion in cost facing hospitality in April will have.
They have warned that the cost increases will cause small business closures within a year, businesses to consider investment plans, jobs to be drastically cut, hours for team members to be reduced, and contract caterers to struggle to meet important public sector catering contracts for schools, hospitals and prisons.
Hospitality is disproportionately affected by the changes to employer National Insurance Contributions (NICs). The lowering of the threshold at which employer NICs is paid to GBP £5,000 will bring in thousands of part-time staff that were previously never affected, disproportionately affecting hospitality.
The signatories have put forward to the Government two measures to mitigate this impact. They suggested the creation of a new employer NICs band from GBP £5,000 to £9,000 with a lower rate of five percent, or implement an exemption for lower band taxpayers working fewer than 20 hours per week, targeting support for part-time and lower paid workers.
The letter outlined how the changes to the NICs threshold are not just unsustainable for businesses.
“They are regressive in their impact on lower earners and will impact flexible working practices, which many older workers and parents rely upon. Unquestionably, they will lead to business closures and job losses within a year,” as stated in the letter.
“There is no capacity to pass the costs onto customers. Businesses would be reluctantly forced to raise prices by six to eight percent, fuelling inflation, yet could not realistically do so as our customers are at the end of their ability to pay more.”
More news here.
