Liberal Democrat leader Ed Davey visited Paignton Pier in Torbay this week to call for hospitality to be excluded from National Insurance, stating the April increase will cost the South West tourism industry £390m over the next five years.
Liberal Democrat leader Ed Davey has called for hospitality and tourism businesses to be exempt from NI increases coming into effect this April, during a visit to the arcade and crazy golf centre at Paignton Pier in Torbay.
The MP was joined by pier director Jolene Wallis and Torbay MP Steve Darling, warning that the increase will bring hospitality approximately £390m of extra costs over the next five years, with a £75m increase for 2025/26 alone.
“We didn’t want the national insurance hikes in the first place,” Davey told the Torbay Weekly. “However, if the government insists on proceeding, the tourism industry must be exempt due to its seasonal nature. We are also campaigning for exemptions for other services, including GPs, pharmacies and hospices.”
“I think this is one of the most poorly designed tax changes I’ve ever seen. I think the government simply doesn’t understand the impact it will have on charities, vulnerable people and community pharmacies. It really is shockingly ill-thought-out.”
According to recent figures produced by UKHospitality, the nationwide hospitality industry could face an additional tax burden of £4.5bn by 2030, with seasonal businesses disproportionately impacted.
Reporting on the case of the Paignton Pier Leisure and Chippy company, the Torbay Weekly noted seasonal work patterns mean “staff earn most of their income in the first six months of the year, quickly surpassing the national insurance threshold. This leads to higher employer contributions as theirs are not spread evenly over salaries across 12 months.”
“There is currently no provision in the national insurance rise to guard against this for seasonal businesses. The business said that it may have to limit opening hours in off-peak months and could reduce opportunities for employment in the winter months.”
Darling recently tabled an Early Day Motion to recognise the contribution hospitality and tourism makes to the economy, stating “tourism is the lifeblood of many communities across the South West.”
“We cannot afford to underestimate the vital role this industry plays in the region, especially here in the English Riviera.”
