Budget puts 625,000 hospitality jobs at risk

26-Oct-2018 - Last updated on 26-Oct-2018 at 08:59 GMT

High street 'bloodbath': a worst-case scenario predicts the loss of up to 625,000 jobs if business tax isn't sorted

Related tags Tax

More than half-a-million hospitality jobs will be at risk if the Government doesn’t take urgent action on business taxation, UKHospitality has cautioned.

The warning follows a Morning Advertiser (MA) investigation into the cost of alcohol in supermarkets compared to pubs, which is significantly lower due to tax and business rates rules that favour the off-trade.

UKHospitality has advised that 625,000 jobs in pubs, bars and restaurants could be wiped out, and investment stunted, if the Budget does not favour the sector.

The best and worst-case scenarios for the industry have been outlined in The Economic Contribution of the UK Hospitality Industry Report, and how, if over taxation continues, a significant number of jobs will be lost.

Within the report, 625,000 is the difference in the number of hospitality jobs forecast in the best and worst scenarios for the sector.

Employment will grow by 10%

In the best case, employment will grow by 10% by 2022. Alternatively, employment will decline by 10% on current levels.

“This is sobering news and it should serve as a huge warning sign for the Government,” said UKHospitality chief executive Kate Nicholls.

“Thousands of hospitality businesses, including hotels, pubs, restaurants, visitor attractions, nightclubs and cafés – face a £113m business rates bombshell from next April.

“They are increasingly struggling from the effects of a disastrous rates revaluation last year and an archaic tax system that is shutting down the UK’s growth engine and resulting in a bloodbath on our high streets,” she continued.

“The threat of losing over half a million UK jobs must surely be reason enough for immediate action.”

UKHospitality, along with other trade bodies and business owners, have called on the Chancellor to announce a freeze on business rates increases in the Budget this month and to introduce a new digital tax to slash the rates burden on hospitality from April 2020.

£39bn in tax

Some £39bn in tax for the Exchequer is generated by the trade each year, funding vital public services.

Hospitality is the third largest private sector employer in the UK, double the size of the financial services market, and bigger than the automotive, pharmaceuticals and aerospace markets combined.

Beds & Bars chief executive Keith Knowles said: “We urgently need root-and-branch reform of the business rates system.

“As a group, our total property tax bill increased by £675,000 this year – a rise of 64% – with huge double-digit hikes across UK venues, compared to an average of 2% increases for our European sites.

“This severely restricts our ability to invest and create jobs,” he continued. “This Government must decide whether it wants to continue to create the environment for recession or instead build an environment for investment, growth and job creation.”