The hospitality industry calls for a postponement of the National Insurance hike set for April, fearing significant job losses and operational challenges.
Pubs and hospitality firms across the UK are calling for a delay in a planned increase in National Insurance contributions set to take effect from April 6. This plea comes following a survey conducted by prominent industry trade bodies, which indicated that a significant majority of businesses in the sector are anticipating adverse impacts on their staffing levels.
The survey, executed by the British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster, and UKHospitality, revealed that approximately 70 per cent of respondents are likely to reduce their workforce due to the impending hike in National Insurance. This increase was announced by Chancellor Rachel Reeves in the recent Autumn Budget and is perceived as a potential threat to thousands of jobs within the hospitality sector.
Further findings from the survey highlighted that almost a third, or 29 per cent, of businesses might have to shorten their opening hours as a response to rising operational costs. Additionally, 15 per cent indicated that they would have to close at least one of their establishments in an effort to manage the increased financial burden.
The firms that participated in this survey collectively operate around 8,300 sites across the UK. In a joint statement, the aforementioned trade bodies emphasised the crucial role that hospitality plays in contributing to economic growth. They stated, “At a time when hospitality has been one of the top contributors to economic growth, the last thing the Government should be doing is piling on costs that will impact employment and cut off our ability to grow.” They further expressed a desire to collaborate with the Government to stimulate growth, urging a reconsideration of the changes to the employer National Insurance contributions threshold.
In addition to seeking a delay on the National Insurance increase, the hospitality sector is also appealing for a reduction in the VAT rate applicable to the industry. This measure, they argue, would encourage consumer spending and provide additional support to pubs and hospitality businesses.
Starting from April, the threshold at which employers are required to pay National Insurance on their staff’s wages will be lowered significantly from £9,100 to £5,000 annually. While Labour representatives have maintained that the tax rise would not adversely affect working individuals, business owners are warning that the increased financial burden may lead them to enact job cuts, close locations, and issue smaller pay rises.
This concern from the hospitality sector coincides with a recent poll from the Federation of Small Businesses, which suggested that one-third of small firms are contemplating staff reductions ahead of a new employment rights Bill, combined with rising labour costs stemming from the Budget tax hikes and an increase in the minimum wage.
The situation adds to the mounting pressure on Chancellor Reeves as she prepares to deliver her Spring Statement next month, a backdrop that could significantly affect future fiscal measures and support for the beleaguered hospitality industry.
Source: Noah Wire Services
- https://ceres.shop/blog/national-insurance-increase-faces-backlash-amid-hospitality-fears/ – This article supports the claim that the planned increase in National Insurance contributions is facing backlash from the hospitality sector, with concerns about potential job losses and business closures. It also highlights the economic implications for small and medium-sized businesses.
- https://www.thecaterer.com/news/national-insurance-rise-will-wipe-out-hospitality-venues-mps-warn – This article corroborates the concerns raised by MPs about the impact of the National Insurance increase on the hospitality sector, describing it as ‘catastrophic’ for small and medium-sized businesses.
- https://www.rwkgoodman.com/info-hub/the-impact-of-increased-national-insurance-contributions-on-the-uks-hospitality-sector/ – This article explains how increased National Insurance contributions will pose significant challenges for the UK hospitality sector, including higher payroll costs and potential workforce restructuring.
- https://www.noahwire.com – This source provides the original context for the article, including the survey findings from industry trade bodies and the concerns about the impact of National Insurance increases on the hospitality sector.
- https://www.ukhospitality.org.uk/ – UKHospitality is one of the trade bodies involved in the survey and advocacy efforts regarding the National Insurance increase. Their website likely contains information supporting the sector’s concerns about the impact of these changes.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative references recent events such as the Autumn Budget and upcoming Spring Statement, indicating it is relatively current. However, without specific dates for the survey or press releases, it’s difficult to determine if the content is entirely new or recycled.
Quotes check
Score:
6
Notes:
There are no direct quotes from specific individuals, but a joint statement from trade bodies is mentioned. Without specific attribution or online sources for these statements, it’s challenging to verify their originality.
Source reliability
Score:
9
Notes:
The narrative originates from the Daily Mail, a well-known publication. The information is supported by references to prominent industry trade bodies, which adds credibility.
Plausability check
Score:
8
Notes:
The claims about potential job cuts and operational changes due to tax increases are plausible given the context of rising costs and previous economic challenges in the hospitality sector. However, specific figures and impacts could vary based on numerous factors.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative appears to be current and well-supported by credible sources. While some details lack direct verification, the overall context and claims align with plausible economic concerns in the hospitality sector.
