We are governed by people who don’t know what they’re doing
Almost 100,000 jobs in the hospitality sector have disappeared since the government unveiled its hike to employers’ National Insurance Contributions, and lowered the threshold at which it is paid.
Employers have also had to contend with a rise in the minimum wage amid a storm of other headwinds including inflation, energy costs and generally weak economic activity. No surprise, therefore, that this summer – in contrast to previous seasons – there are many fewer holiday jobs on offer.
Hospitality, leisure and tourism normally swell their ranks with young people to meet a spike in demand but this year many restaurants, bars, hotels and pubs have made other arrangements. Shorter opening hours, simpler menus, cutting back on table service and stretching fewer staff over a busy rota are just some of the ways that a struggling sector is muddling through what’s traditionally the money-making period.
And that’s just among the businesses that have survived; more than 1,100 hospitality venues have shut since Labour won the election.
Businesses face being ‘taxed out of existence’
Against this backdrop, the chair of UKHospitality, Kate Nicholls, has warned that the sector faces “the very real risk of being taxed out of existence.” It seems particularly odd, therefore, that ministers’ focus isn’t on how to save or even support this sector, but on how to increase costs yet further. Deputy PM Angela Rayner and Business Secretary Jonathan Reynolds – neither of whom, it should be noted, know the first thing about employing people, have written to the Low Pay Commission (LPC) ahead of the body’s next review of the minimum wage, saying they are “committed to ensuring that the minimum wage is a genuine living wage”.
The minimum wage (or national living wage) is currently £12.21 an hour, but could rise to as much as £12.86 next April, with government backing. Ministers also want the minimum wage for 18 to 20 year olds (£10 an hour) to come into line with the full rate. In their letter to the LPC, Rayner and Reynolds blithely say they want to generate “inclusive growth” – which is interesting, given the damage their first year in office has caused to jobs, business confidence and living standards.
The hospitality sector is just one part of our economy; retail is suffering the same fate while other areas are feeling the pressure for different reasons.
I’m afraid it’s hard to escape the conclusion that we are governed by people who simply don’t know what they’re doing.