UKHospitality warns tax rises risk ‘locking a generation out’ of work

UKHospitality has warned that a whole generation of young workers risk being locked out of working opportunities as unemployment reaches its highest levels in five years.

Unemployment in the UK has risen to its highest level in nearly five years, according to data from the Office for National Statistics (ONS).

The rate increased to 5.2% in the three months to December, up from 5.1% in the three months to November, with young people aged between 16 and 24 bearing the brunt with unemployment for that cohort rising to 16.1%, its highest in more than 10 years.

Allen Simpson, chief executive of UKHospitality, said the figures “underline the growing strain on the UK jobs market”.

He added: “Sadly, younger workers and entry level roles are bearing the brunt of this slowdown, with employment among under-35s down sharply since mid-2024. Hospitality is a vital entry point into work for young people, but rising costs and policy decisions – including changes to employer National Insurance, costing the sector £3.4bn a year – are making it harder for businesses to create, sustain and recruit into these roles.

“Without urgent action to ease the pressure on employers, we risk locking a generation out of vital opportunities to gain skills, experience and a foothold in the workforce.”

He went on to say that if the government wants to promote growth and tackle youth unemployment, “it must urgently ease the pressure on hospitality businesses and stop taxing jobs out of the economy.” 

UKHospitality previously warned it was “entirely plausible” the sector could lose a further 100,000 workers as a result of the latest Budget.