Rachel Reeves is under fire after Britain’s pubs, bars and restaurants suffered the worst job losses of any sector since her Budget tax rises last autumn.
Industry body UKHospitality said nearly 90,000 hospitality jobs have disappeared since the Labour Chancellor pushed through a £25bn increase in employer taxes in October.
That represents 53% of all 165,000 redundancies across the economy, making hospitality the biggest casualty of Reeves’s measures.
The scale of the losses is almost double the 50,000 redundancies the Office for Budget Responsibility forecast when Reeves unveiled her plan, fuelling criticism that Labour underestimated the impact of its tax hikes.
Businesses in the sector have been particularly exposed because the Chancellor not only raised the employer National Insurance rate from 13.8% to 15%, but also slashed the earnings threshold from £9,100 to £5,000 a year. That dragged many of the low-paid, part-time workers who underpin pubs, cafes and restaurants into higher tax bills.
Kate Nicholls, chief executive of UKHospitality, said Reeves’s policies had created a crisis. “The number of job losses suffered in hospitality since the Budget is staggering,” she said. “More than half of all job losses since October occurring in hospitality is further evidence that our sector has been by far the hardest hit by the Government’s regressive tax increases.”
Nicholls said employers were now closing sites, reducing hours and halting investment to cope with higher costs. “The sheer scale of costs being placed upon hospitality has forced businesses to take agonisingly tough decisions to cut jobs – with part-time and flexible roles often those most at risk,” she added.
The strain is also showing in recruitment. According to the Office for National Statistics, the number of vacancies in accommodation and food services fell to 73,000 in the three months to July, the lowest outside the pandemic since 2014, and 20% down on pre-Budget levels.
UKHospitality has urged Reeves to reverse what it described as “devastating” tax raids, calling instead for cuts to VAT on food and drink, changes to NICs and a permanent reduction in business rates.
The Chancellor is already grappling with worsening public finances. The National Institute of Economic and Social Research estimates she must find £50bn to meet her borrowing targets. That shortfall has been deepened by Labour’s U-turns on welfare and winter fuel payment cuts, forcing Reeves to consider more tax rises, including an extension of frozen income tax thresholds and possible new levies on property or pensions.
Worth reading in full here: https://www.telegraph.co.uk/business/2025/08/25/half-of-all-job-losses-since-budget-hospitality/
