As the amusements, gaming and hospitality sectors call brace, brace for a £25bn rise in employer NICs, commentators from UKHospitality, the Bank of England and the CBI have all highlighted the disproportionate impact that new tax measures are likely to have on recruitment and investment across the industry.

Bodies including the Bank of England, UKHospitality and the CBI have all highlighted the detrimental impact that this month’s £25bn increase in employer NICs will have on the hospitality sector, noting that recruitment, investment and growth will all be affected.

With hospitality vacancy rates already falling faster than in other UK industries, stakeholders have urged chancellor Rachel Reeves to rethink the “regressive” tax policy in order to help pubs, bars and restaurants grow the economy by allowing them to thrive.

“The Office for Budget Responsibility said Reeves’s tax changes were contributing to falling recruitment and rising redundancies,” reported The Observer. “Coupled with a 6.7 percent increase in the national living wage from Tuesday, to £12.21 per hour for those aged 21 and over, the Bank of England has also warned employers are freezing hiring plans.”

UKHospitality CEO Kate Nicholls branded Reeves’ budget “the most regressive tax change I have seen in 30 years in hospitality,” while former Bank of England deputy governor Charlie Bean said the policy represents “a cardinal error.”

“I understand the thinking, but it is a case of the politics overtaking the economics. There has been enough pushback from business and it’s becoming clear what the adverse effects are. But any chance of U-turn? From an economic point of view that would be sensible.”

With the rate of employer NICs set to rise from 13.8 percent to 15 percent and the annual threshold cut from £9,100 to £5,000, the Observer wrote that “hospitality, leisure and retail will be hit particularly hard, largely as these sectors employ more low-paid workers and temporary staff, where slashing the NICs threshold will have the biggest impact.”

Arc Hospitality Recruitment director Mike Gavin predicted “an effective doubling in our employer NI bill,” even as the number of vacancies diminishes.

“It has knocked business confidence and made it harder for firms to hire, invest and grow,” added CBI chief economist Louise Hellem. “Firms are squarely behind this government’s growth mission and want them to succeed. But it’s the capacity for businesses to invest that will decide whether we grow or not. They need a boost in confidence.”