UK (Parliament Politics Magazine) – Labour’s NIC hike drives major fall in summer roles, with hospitality cuts pushing seasonal vacancies to their lowest level since 2018.
As reported by The Telegraph, Chancellor Rachel Reeves’ jobs tax has pushed summer vacancies in bars and restaurants to a seven-year low.
What did Indeed reveal about the drop in summer jobs?
Recent figures from Indeed show that seasonal vacancies have dropped to their lowest level since 2018, excluding the pandemic era. The drop follows job cuts across the hospitality sector after Rachel Reeves increased employer National Insurance contributions.
The findings reignite concerns over youth employment prospects, with graduate roles declining as AI replaces tasks once done by junior staff. Indeed revealed a 33% year-on-year drop in graduate job postings as of June.
According to Indeed’s Matt Burney, the summer job slump reflects a broader slowdown in the labour market, with job seekers facing tighter competition.
What did Kate Nicholls say about hospitality’s role in job creation?
Kate Nicholls, chairman of UKHospitality, said,
“The NICs change was socially regressive and had a disproportionate effect on entry-level jobs.”
She added,
“In the years following the financial crisis, we created one in five net new jobs and today employ 3.5m people. The Government needs sectors like hospitality to create jobs and meet their ambition to get more people back into work.”
What did UKHospitality reveal about Labour’s tax changes?
According to UKHospitality, 69,000 workers have lost jobs in pubs, restaurants, and hotels after Labour’s tax changes.
The lobby group raised concerns that failing to reverse the NIC hike could result in over 150,000 job losses across the hospitality industry.
What did the CBI find about job losses in the City this summer?
The City faces more turbulence as the Confederation of British Industry issues a warning. Financial firms are preparing to speed up job cuts in the coming months.
According to a CBI poll conducted between April and June, the financial sector experienced its most significant slowdown in over 12 months.
Andrew Griffith’s views on Labour’s impact on business
Shadow business secretary Andrew Griffith branded the CBI’s findings “damning,” saying they expose the toll of Labour’s “war on business.”
He added,
“These jobs remain valuable for young people to gain practical experience in hands-on, business, or academic settings. While opportunities have declined, summer jobs haven’t disappeared.”
Labour National Insurance Contribution hikes
- Employer NIC increase:
From April 2025, the rate went up from 13.8% to 15%, and the payment threshold dropped from £9,100 to £5,000, raising costs for businesses. - Employee NIC rates:
Employee rates stayed the same (8% and 2%), but more workers are paying due to frozen income thresholds. - Impact on businesses:
Employers now pay £770–£900 more per worker yearly. Small businesses are hit hardest and some use salary sacrifice to cut costs. - Political context:
Labour raised NICs to fund £25bn for public services, despite promising not to raise taxes for “working people.” - Criticism:
Critics say it hurts both businesses and workers. OBR says 60% of the cost may be passed to staff through pay cuts or price hikes.