Heavy taxation imposed by Labour results in devastating job losses for the hospitality sector, with roughly 90,000 positions disappearing.
The hospitality sector in Britain has been hit hard by the economic measures introduced by Chancellor Rachel Reeves, with nearly 90,000 jobs lost since her Budget last autumn. This sector, which accounts for 53% of all the 165,000 redundancies across the economy, has been the biggest casualty of Reeves's measures.
The Office for Budget Responsibility had initially forecasted 50,000 redundancies when Reeves unveiled her plan, but the actual number is almost double that. The strain is showing in recruitment, with the number of vacancies in accommodation and food services falling to 73,000 in the three months to July, the lowest outside the pandemic since 2014, and 20% down on pre-Budget levels.
Employers in the sector are closing sites, reducing hours, and halting investment to cope with higher costs. The Chancellor raised the employer National Insurance rate from 13.8% to 15% and slashed the earnings threshold from £9,100 to £5,000 a year, which dragged many low-paid, part-time workers into higher tax bills.
Kate Nicholls, chief executive of UKHospitality, said Reeves's policies had created a crisis in the hospitality sector. She urged the Chancellor to reverse what she described as "devastating" tax raids, calling instead for cuts to VAT on food and drink, changes to NICs, and a permanent reduction in business rates.
The closure of pubs, bars, and restaurants is not just an economic blow but a cultural and social tragedy, affecting British life. The UK's job market is experiencing a slowdown at the worst rate in four years since the pandemic, due to Chancellor Rachel Reeves' tax-raising Budget.
The Chancellor is grappling with worsening public finances and must find £50bn to meet her borrowing targets, with Labour's U-turns on welfare and winter fuel payment cuts deepening the shortfall. As the hospitality sector continues to struggle, the government faces growing calls to reconsider its tax policies and provide support to an industry in crisis.
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