Spring statement fails hospitality as National Insurance Hikes hike looms, UKHospitality warns
26 March 2025, 17:15
Hospitality businesses will have sat down this lunchtime for the Chancellor’s Spring Statement, hoping that the disastrous impacts of the looming cost increases facing them will have been heard and would be addressed.
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Around 40 minutes later when the Chancellor sat down, they were left bitterly disappointed.
Today’s statement provided the Government with a chance to come forward with a clear plan for growth, which included a delay to the hugely damaging changes to employer National Insurance Contributions.
Instead, what we got was a missed opportunity for the Government to demonstrate that it had heeded the sector's concerns.
Those concerns had been communicated loudly, clearly and repeatedly by hospitality businesses and UKHospitality, the voice of the sector. As a result of cost increases announced in last October’s Budget, the sector faces a £3.4 billion annual increase to its bills each year.
That will be devastating to our ability to unlock growth and jobs, for everyone, everywhere.
The Government’s own analysis shows the impact the changes to the employer NICs threshold will have. It will force businesses to freeze recruitment, reduce hours available for staff and reduce employment levels, as well as depressing wage growth.
It’s clear that tax and welfare policies remain disjointed and in conflict with one another, because tax policy is directly hurting the foundation economy’s ability to help get people back into work and out of welfare.
There needs to be a new approach to all of this – one that is much more holistic and doesn’t narrowly focus on economic growth.
UKHospitality published new research this week that proves hospitality and the foundation economy are essential to the Government’s plan to create jobs where they’re needed, not just in clusters in London and the South East.
It shows that foundational sectors, like hospitality, are the most effective at delivering growth widely, creating positive social impact and ensuring social and geographic accessibility.
These qualities are essential to deliver the Government’s ambitions to get more people back into work, and to create a fairer economy and society.
With April only days away, time is running out but there is still time for the Chancellor to act and avert the employer NICs disaster.
If we are serious about getting Britain working, delay the changes to employer NICs, bring forward a plan for the high street and back hospitality.
Kate Nicholls OBE is the Chief Executive of UKHospitality
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