UKH calls for NIC rethink as 100,000 jobs lost in May

UKHospitality has called for the increase in employer National Insurance Contributions (NICs) to be reconsidered, as new figures from the Office for National Statistics (ONS) indicate that more than 100,000 jobs were lost in May as a direct result. 

The Labour Market Overview, which was published today (11 June), estimates a decrease of 109,000 payrolled employees in the UK compared to April. The figure exceeds earlier forecasts from the Office for Budget Responsibility (OBR) and Deutsche Bank, both of which had anticipated losses resulting from the NICs hike.

The OBR had initially predicted the measure would cost 50,000 jobs before warning the impact would likely be greater, while Deutsche Bank forecast a loss of 100,000 jobs.

UKHospitality chair, Kate Nicholls, said the figures showed the impact of the policy had gone “far beyond the worst-case scenario” anticipated by both the OBR and the private sector.

Nicholls said: “We were clear at the time that the changes to NICs were a tax on jobs, and so it is sadly proving. At a time when we are all striving to grow the economy and help people back into work, the changes to NICs are acting as an anchor to the Government’s ambitions.

“Sectors like hospitality are the very sectors you need to create jobs in every part of the UK and for people of all ages, education and background, but hospitality and those working part-time are among the hardest hit by these tax increases.”

She added: “These shocking figures should make it abundantly clear to the Government that the changes to employer NICs are inflicting more harm than good, and they should be reviewed and reversed urgently.”