#Budget26 – backing hospitality to deliver growth

Jobs are not interchangeable. Hospitality creates accessible jobs for people and in places that many higher-productivity sectors do not reach.

Recent years have risked that. Rising energy and food costs, allied with consumers reaching the edge of their ability to pay more, have been worsened by conscious policy choices which have threatened the survival of hospitality businesses across the UK.

Employer NICs have been redesigned in a way that disproportionately taxes lower-paid and part-time jobs. Business rates have been doubled on hospitality to protect the tax on global online giants. These pressures are felt differently across the sector – from hotels, pubs and restaurants to contract caterers, holiday parks, indoor leisure and visitor attractions – but share a common feature: they tax employment, physical presence and domestic spending before profitability is assured.

For years, hospitality was creating jobs while sectors like retail declined. But recent policy choices have reversed that trend. A national growth engine was pushed back into the pack.

The consequences are visible in jobs, business survival and future growth. Nearly 100,000 hospitality jobs have gone in the past two years with young people and people working part time around their wider responsibilities directly affected.

For many others, hours have been seriously cut back, affecting their incomes and increasing reliance on benefits. Hospitality businesses are more likely to become insolvent than the average business, while hospitality investment intention is significantly lower than the wider economy.

This is a moment for change. For opportunities for everyone, in every postcode. The answer is not simply to subsidise hospitality. It is to stop disproportionately taxing the employment, physical investment and domestic consumption on which the sector depends.

Rebalancing our tax system will create hospitality jobs. Those jobs will make a contribution to solving the NEETs crisis, with nearly a million young people not earning or learning. It will make hospitality businesses sustainable. Those businesses will bring dignity back to our high streets. It will bring costs down. That will help the cost of living.