Hotel boss warns over Labour's attack on job creation and investment

One of Britain’s leading hoteliers has warned Labour that ‘policy after policy is threatening job creation and investment’ – with the young bearing the brunt of the pain.

As the youth unemployment crisis deepens, a senior executive at Hilton urged ministers to ease the tax burden on business to boost hiring and create more ‘entry-level’ opportunities.

‘Hospitality can be part of the solution and open the door to work for a generation, but only if policies support job creation, not hinder it,’ said Steve Cassidy, managing director of Hilton in the UK and Ireland.

The comments echoed those of Fiona Eastwood, chief executive of Alton Towers owner Merlin Entertainments, who said the UK ‘spends far more supporting young people out of work than it does helping them into it’.

Bosses are speaking out in response to a hard-hitting report by Labour grandee Alan Milburn into youth unemployment that warned Britain faces a ‘lost generation’ who risk spending a lifetime on out-of-work benefits.

Unemployment among those aged 16 to 24 stands at an 11-year high of 16.2pc while more than one million of this cohort are now classed as NEET – not in education, employment or training.

Hilton's UK boss Steve Cassidy says hospitality has long offered first jobs for young people

‘Alan Milburn’s interim report into young people and work needs to be the catalyst for government action to ensure hospitality remains one of Britain’s strongest routes into employment,’ said Cassidy.

‘Hospitality has always been a pathway employer, offering first jobs for young people. But its status as a career entry point is under severe pressure just when our young people need opportunities and our country needs growth.’

He said efforts to get more young people into work – such as apprenticeships and training – will not work ‘if the cost of employing people keeps rising’

‘Policy after policy is threatening job creation and investment, with increased National Insurance contributions - compounded by business rates hikes, a proposed holiday tax, high VAT and energy costs - squeezing the sector at the wrong moment,’ he said.

‘There seems to be a misconception in government that hotels can absorb these never-ending cost increases. That is not the reality.’

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Cassidy called for VAT on hospitality to be cut from 20pc to 10pc, national insurance tax breaks for employing those aged under 24 and ‘meaningful reforms to business rates’ – a policy promised by Labour but ducked by Rachel Reeves.

‘We need to learn from other countries that place hospitality and tourism at the heart of their growth strategies,’ he said.

‘Without a more competitive approach, investment will move elsewhere, development will slow, and the sector’s ability to create jobs and growth will further weaken.

‘If we want employers to create more entry-level opportunities, the government must consider lifting these burdens.’

Hotels can't absorb these never-ending cost increases

By Steve Cassidy, managing director in the UK & Ireland at Hilton

Alan Milburn’s interim report into young people and work needs to be the catalyst for government action to ensure hospitality remains one of Britain’s strongest routes into employment.

For generations, hospitality has not only provided the summer and Saturday job that gives people their first experience of responsibility, resilience and teamwork, but has also offered, for so many, a lifelong career.

Today, hospitality remains the largest employer of young people with nearly 39% of its workforce aged 16–24 – and as a sector it is the UK’s third largest employer overall. More than 17,000 people work across Hilton's 200 UK hotels alone.

Hospitality has always been a pathway employer, offering first jobs for young people, with Hilton and others providing vital routes into work for those from disadvantaged backgrounds and those with learning disabilities. But its status as a career entry point is under severe pressure just when our young people need opportunities and our country needs growth.

It is critical that we modernise apprenticeships so they reflect young people’s needs, invest in technical education to grow our sector’s workforce, and strengthen connections between employers, schools and colleges - with the goal of better preparing more young people for work.

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But none of this will work if the cost of employing people keeps rising. Policy after policy is threatening job creation and investment, with increased National Insurance contributions - compounded by business rates hikes, a proposed holiday tax, high VAT and energy costs - squeezing the sector at the wrong moment.

The numbers are stark. The average hotel’s business rates bill is increasing by 115% over the next three years. And recent Oxford Economics analysis suggests the government’s proposed levy on overnight stays could reduce tourism spending by £1.8 billion and result in 33,000 job losses per annum.

Not only that but the UK’s 20% VAT rate on hospitality is one of the highest in Europe - almost three times Germany’s and double the rate applied in France, Italy and Spain.

There seems to be a misconception in government that hotels can absorb these never-ending cost increases. That is not the reality.

We need to learn from other countries that place hospitality and tourism at the heart of their growth strategies. Without a more competitive approach, investment will move elsewhere, development will slow, and the sector’s ability to create jobs and growth will further weaken.

If we want employers to create more entry-level opportunities, the government must consider lifting these burdens in response to Milburn’s final report in September. Cutting hospitality VAT to 10%, in line with Europe, ensuring National Insurance Contributions are zero-rated for all under 24s and delivering meaningful reforms to business rates to support the whole of hospitality would be a good place to start.

Hospitality can be part of the solution and open the door to work for a generation, but only if policies support job creation, not hinder it.

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