Fresh GDP figures and this week’s employment data have laid bare the severe consequences of April’s increase to employer National Insurance Contributions (NICs).
According to the Office for National Statistics, the UK economy shrank by 0.3% in April, with the number of payrolled employees plunging by 109,000 in May compared to the previous month – surpassing even the most pessimistic forecasts.
Industry leaders, including UKHospitality’s Chief Executive Kate Nicholls, warn that these policy changes are stifling growth and putting the brakes on job creation, particularly in the already embattled hospitality sector.
As economic warning signs intensify, calls are mounting for the government to urgently review and reverse the NICs hike to prevent further harm to growth and employment.
Today’s GDP data and this week’s jobs numbers are beginning to reveal the devastating impact of increases to employer NICs.
Kate Nicholls, Chief Executive of UKHospitality, said: “It’s clear that economic warning signs are flashing and the impact of April’s cost increases are having exactly the impact that was predicted.
“GDP figures can be volatile but an immediate shrinking of the economy and more than 100,000 jobs lost in just a month shows that the huge increase to employer NICs is putting the brakes on growth.
“Hospitality is a resilient sector and businesses are doing all they can to trade their way out of these challenges, but it has the potential to be the engine for growth if it is properly backed.
“The economy only grows when hospitality is strong. The Government needs to take these warning signs seriously and urgently review and reverse the changes to NICs, while bringing forward clear plans to empower hospitality and the high street.”
