Mon 24th Feb 2025 - Looming cost increases could force 70% of hospitality businesses to reduce employment levels Looming cost increases could force 70% of hospitality businesses to reduce employment levels: Sector trade bodies have urged the government to work with them and delay the employer national insurance contribution (NIC) threshold changes so that hospitality can continue to boost the economy, as 70% said the cost increases could force them to reduce their employment levels. A joint survey by leading hospitality trade associations – The British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster and UKHospitality – has revealed how the sector fears it will be drastically affected by new employment costs and the reduction in rates relief come April. The survey, which questioned businesses representing 8,300 sites in January 2025, found that 60% would cancel planned investment; 29% will reduce trading hours; 25% have no cash reserves left (up six percentage points since October 2024); and 15% believe they will have to close at least one site. The trade associations said a delay to the changes to the employer NICs threshold would avoid the immediate impact on jobs and investment revealed in the survey. Instead, it would allow hospitality to deliver economic growth further and faster. When asked how the government could support the sector, businesses cited a reversal of employer NIC changes as the second biggest priority after a lower rate of VAT for hospitality. In a joint statement, the trade bodies said: “These figures should serve as a clear warning that pubs, brewers and hospitality venues will be forced to make painful decisions to weather these new costs, which will have damaging impacts on businesses, jobs and communities. 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. We want to work with the government so we can continue to vitally boost the economy, which is why we urge them to delay the changes to the employer NICs threshold. This would help save jobs and allow the sector to continue on its growth path. If it doesn't act then businesses are clear that the impact on communities, employees and supply chains will be significant. They have warned about potential lost earnings, lost jobs, reduced trading hours and, in some cases, business failure. This would mean the loss of essential community hubs that would otherwise drive the local economy and create jobs. Our message to government is to delay its changes to the employer NICs threshold and allow hospitality to continue to deliver economic growth, regenerate our high streets and support local communities.”