Hospitality’s Tough Nudge from the Autumn Budget
It’s a hard pill to swallow for the hospitality industry, but the latest Budget has left the sector staring at some pretty harsh decisions.
What’s Happening?
On 30 October, the Chancellor announced a £25.7 billion tweak to employers’ National Insurance contributions that will kick in from April 2026. In plain terms, it’s a tax on jobs which will squeeze the budgets of every hospitality business.
Luke Johnson’s Take
Former Pizza Express chair and current investor behind Gail’s bakery, Luke Johnson, told BBC Radio 4’s Today Programme that the sector will have to make some “really tough choices.”
He was quick to point out that:
- It’s essentially a “mistake” because it’s a tax on work.
- The levy is regressive, meaning it’ll hit low‑earning staff the hardest.
- It’s a massive deterrent for labour‑intensive outfits like cafes, restaurants, and retail.
“It’s millions of pounds, and we have some terrible choices to make about whether we cut back on growth,” Luke added. “We might have to employ fewer people, change shift patterns or even slash certain services.”
How Different Businesses Will Feel It
While Gail’s has fared well, Johnson stated that many other businesses are still reeling from the aftershocks of lockdowns and soaring energy costs. Those firms are bracing for decisions that could reshuffle staff levels, reduce working hours or cut back on expansion plans.
Bottom Line
For hospitality and retail, the Budget’s new National Insurance charges mean rethinking growth strategies, employment — and perhaps coming up with creative, cost‑saving solutions that keep the fire of the industry burning.
