Jonathan Kaye, who runs the Prince of Wales pub, said this week’s announcements on National Insurance by Chancellor Rachel Reeves would result in pub staff losing their jobs.
From April 2025, the amount firms will pay on their employees’ National Insurance contributions will increase from 13.8 per cent to 15 per cent.
In what she said was a ‘difficult choice’ to make, the chancellor also lowered the current £9,100 threshold employers start paying national insurance on employees’ earnings to £5,000.
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Mr Kaye told the Reporter: “There are a lot of people in hospitality who only work a few hours a week so employers in the industry will have to start paying national insurance for these staff.
“The national insurance announcement is the one that is going to be a killer for a lot of pubs and it is going to result in people losing their jobs.”
He also slammed the decision not to address VAT on food in hospitality.
Currently, most food people buy from shops and supermarkets has a zero rate of VAT, however, this isn’t the case in the hospitality industry.
He said: “The hospitality industry is unfairly treated when it comes to VAT.
“I buy sausages from the local butcher, no VAT, and bread from the local baker, also no VAT.
“But if I make and sell a sausage sandwich and, because I put it on a plate, I have to charge an extra 20 per cent.
“If we were able to save some of or all that added costs we would be in a position to increase our staff’s wages.”
Reeves confirmed that draught duty on alcoholic drinks will fall by 1.7 per cent, and while Mr Kaye welcomed this as good news, he felt it was a token reduction.
The chancellor said the government was handed a challenging inheritance and added these were difficult choices they were prepared to make to rebuild the country.
Mr Kaye said, ahead of Wednesday’s budget, he repeatedly contacted North Herefordshire MP Ellie Chowns to raise his concerns but has not received any response.
He said, although the budget wasn’t as bad as he expected, he was unsure whether his concerns were being heard.
Ellie Chowns said: “It is a huge honour to be MP for North Herefordshire and I am very grateful to everyone who contacts me.
“I apologise to anyone who has not yet heard back.
“As a new MP, I receive thousands of emails and I promise I am working my socks off, with the help of my diligent team, to respond to everyone who has written to me.”
