Hospitality groups warn of more job losses without Budget support

More than half of hospitality businesses say they will be forced to cut staff or raise prices if next week’s Budget (26 November) does not provide additional support, according to a new survey of sector members.

The poll by UKHospitality, the British Institute of Innkeeping, the British Beer and Pub Association and Hospitality Ulster found that 58% of operators expect to take “drastic action” without relief, as the sector continues to face intense financial pressure. Nearly three-quarters of respondents reported having less than six months of cash reserves, while 29% said they had none.

The trade bodies said 50% of businesses have already cut staff and 60% have reduced staff hours. Average hours available to employees have dropped by 8% compared with this time last year. Since April, when £3.4bn of extra annual costs took effect, 70% of respondents have increased prices, with average rises of 5%.

Members identified a business rates discount, changes to April’s employer National Insurance contributions and a cut in VAT as the government measures that would most help them manage costs. Support on business rates was highlighted by 61% of respondents, NICs by 54% and VAT by 84%.

In a joint statement, the groups said: “Economic pressures are mounting at every turn and businesses have been forced to make tough decisions to cut jobs, reduce staff hours and put up prices. Many have already had to close the doors for the last time, leaving communities without the support local hospitality venues provide as a local hub.

“For those surviving, the situation is becoming more worrying. Cash flow is becoming a serious issue, with three-quarters of businesses with less than three month’s cash reserves. Those with no cash reserves – a critical safety net – have reached a record high.”

They added: “This is an urgent situation that demands urgent action at the Budget. No one wants to see jobs and communities hit even further, but it’s clear that they will once again be impacted if there is not adequate support for our sector at the Budget next week.

“Lower business rates, amendments to employer NICs and a cut to VAT are the measures that will deliver the relief and stability that hospitality desperately needs. We urge the Chancellor to act next week to protect cherished local venues, which support local jobs, economies and communities.”