Caroline Voaden: We must support local hospitality businesses

Last week, I had the pleasure of catching up with the founder and CEO of Rockfish, Mitch Tonks in Brixham.

We had a wide-ranging conversation about everything from the positive future for Brixham’s fishing industry to the challenges now facing the hospitality sector. 

The latter is something that often comes up during my conversations with businesses in South Devon. It is abundantly clear that Labour have dealt a series of hammer blows to business in just one year in office. For a government supposedly committed to growth, they appear to be doing the complete opposite.

In a constituency where hospitality is a major employer, I am seriously worried about what is coming down the track. 

The increase in employer national insurance contributions (NICs) is the obvious example. It’s raised in every conversation I have with businesses and charities. 

For Mitch’s business, the cost over just one year will be the equivalent to opening a new restaurant! Think about the impact this has – not only on potential restaurant staff, but also on the local economy, as investment and development is put on hold. Construction, trades, the supplier network – all impacted by the contraction of business. 

Scarily, such a huge bill is not unusual. The trade body UKHospitality, which represents thousands of restaurants, hotels, and pubs, has warned the changes to NICs will cost the industry an extra £1bn, forcing some to cut jobs or slash investment. 

Increasing the employer NIC rate is one thing, but, as Mitch pointed out, the real harm for hospitality comes from the government dropping the threshold after which contributions start, from £9,100 to £5,000.

This is particularly harmful for tourist locations like South Devon, in which many hospitality businesses rely on seasonal workers to get them through the busy summer months. As Mitch highlighted, many of these seasonal workers might not earn £9.1K over their contract (the previous threshold), but may well earn at least £5k, now bringing them into employers’ NI. 

This is already having a terrible impact on seasonal hiring. This month, figures from the Recruitment and Employment Confederation found that job postings for temporary hospitality jobs are 25% lower than this time last year. Locally I’ve heard of summer contracts being ended sooner than usual.

A serious impact of this is that summer jobs are relied on by young people to get their first taste of employment, build their CV and learn skills. They are a crucial stepping stone towards financial independence. Yet because of the government’s decisions, fewer young people today will benefit.

But it is not only seasonal jobs that are down. Shockingly, hospitality has shed 84,000 jobs since last October’s budget, according to the Office for National Statistics, making it the worst affected sector in the UK economy – yet it barely gets a mention. UKHospitality predicts this figure could hit 200,000 by the time the financial year ends in March 2026.

While the government may want to “breathe new life into the high street” by changing planning and licensing rules, the sad truth is that, in their first year, they have simply scared investment in hospitality away. 

Our hospitality sector is the backbone of our community. We have 2,618 hospitality establishments in the South Devon constituency, far higher than the national average. The sector employers over 7,000 people and has turnover of over £399 million. It is absolutely vital to our local economy and must be protected. 

We must value hospitality for the real, credible impact it makes on our towns – treat it with the same respect we give to other sectors in the economy, not just look down on it as something kids do to earn pocket money, or people rely on in the gaps between ‘real jobs’. As a sector which is the second largest employer in the country it was shockingly completely ignored in the recently published UK Industrial strategy – an astonishing omission.

As part of my role as MP, and as Vice Chair of the APPG for Hospitality and Tourism, I am committed to ensuring these concerns are heard loudly in Westminster. 

If you wish to contact me about this or another issue you are facing, please do so at: caroline.voaden.mp@parliament.uk   

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