Ahead of the Budget announcement on Monday, UKHospitality has warned the government that hundreds of thousands of vital sector jobs could be lost and investment stunted, unless urgent action is taken on business taxation.
The Economic Contribution of the UK Hospitality Industry Report highlights best and worst-case scenarios for the hospitality sector and how, if it continues to be overtaxed without government support, a huge 625,000 jobs could be lost over the next five years.
Kate Nicholls, chief executive of UKHospitality, said: “This is sobering news and it should serve as a huge warning sign for the government.
“Thousands of hospitality businesses, including hotels, pubs, restaurants, visitor attractions, nightclubs and cafes – face a £113 million business rates bombshell from next April.
“They are increasingly struggling from the effects of a disastrous rates revaluation last year and an archaic tax system that is shutting down the UK’s growth engine and resulting in a bloodbath on our high streets.
“The threat of losing over half a million UK jobs must surely be reason enough for immediate action.
“We call on the Chancellor to announce a freeze on business rates increases in the Budget and introduce a new digital tax to slash the rates burden on hospitality from April 2020.”
Hospitality is the third largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined.
The sector generates £39 billion of tax for the exchequer, funding vital public services.
It ranks as a top seven employer in every region of the UK, and accounts for up to 11 per cent of the regional workforce.
The figure of 625,000 is the difference in number of hospitality jobs forecast in the best and worst scenarios for the sector.
Under the bull case, employment will grow by ten per cent by 2022, whereas in the bear case employment will decline by ten per cent on current levels.