Employer National Insurance hike could risk jobs amid 95,0000 vacancies

Increasing employers’ national insurance contributions (NICs) could pose a risk to jobs amid some 95,000 vacancies across pubs and restaurants, a hospitality lobby group has warned.

Data released from the Office for National Statistics (ONS) today revealed there are a “stubbornly high” 95,000 openings across the sector, including in venues, cafes and eateries.

Hospitality UK has reiterated its warning against a “tax on jobs” as the government continues to face questions over whether it plans to hike the levy at the 30 October Budget.

Kate Nicholls, UKHospitality chief executive, said: “Labour market data released today shows that vacancies in hospitality remain stubbornly high.

“What this clearly demonstrates is the need for the government to incentivise sectors like hospitality to create jobs and support employment.

“The rumoured increase to employer National Insurance Contributions would do the opposite – a tax on jobs.”

Nicholls warned increasing the tax employers must pay to the Treasury on earnings paid to staff would “hammer” the sector, given “staffing costs are the biggest business expense”.

She added: ““Hospitality businesses are much less able to stomach yet another cost increase, when they’re already managing increases like wages, food, drink and energy. 

“But it is hospitality that is most likely to support people from economic inactivity back into the workforce.

“If the government is to achieve its plan for growth and getting more people into work, it should use the Budget to incentivise that. 

“For hospitality, that means no increases to employer NICs and action to avoid a billion-pound tax bill for venues when business rates relief is set to end in April.”

It comes as Prime Minister Sir Keir Starmer declined to rule out increasing the tax at the Budget, but insisted Labour would keep its promise not to raise taxes on “working people”.

Speaking to the BBC, Starmer said his party had been “very clear in the manifesto that we wouldn’t be increasing tax on working people”.

He added: “It wasn’t just the manifesto, we said it repeatedly in the campaign and we intend to keep the promises that we made in our manifesto.”

Laura Trott, Tory shadow chief Treasury secretary, criticised the government, arguing: “Rachel Reeves previously called the move anti-business and we agree, it is a tax on work that will deter investment, employment and growth, and the OBR says it will lower wages.

“Only a day after their investment summit, the Prime Minister and Chancellor are choosing to sow further uncertainty and chaos for businesses by opening the door to a new jobs tax.”

While the Lib Dem Treasury spokeswoman Daisy Cooper hit out at Labour, adding: “The Chancellor should be protecting these smaller businesses, who are the backbone of our economy and the heartbeat of our communities.

“Now is not the time to raise national insurance rates on our high streets, local businesses and dynamic entrepreneurs.”