Hilton hotels boss calls on Burnham to save first jobs with tax breaks to tackle £14bn youth unemployment crisis

A leading hotel chain has called on the Government to slash taxes so that hospitality firms can help tackle a £14.4billion youth unemployment crisis.

One in four unemployed young people say their biggest barrier to getting a job is a lack of experience, according to a report by WPI Economics and commissioned by hotel giant Hilton.

This ‘experience gap’ is costing the economy £14.4billion, including in tax revenues and additional benefits spending, the research found.

But providing one unemployed young person with their first job generates more than £152,000 in economic value, it said.

There are now a record 16.2 per cent of 16 to 24-year-olds who are ‘not in education, employment, or training’ – so-called NEETs.

Around 400,000 of this group are actively looking for work, according to Office for National Statistics (ONS) figures.

The hospitality sector is uniquely placed to tackle this crisis by offering Brits their first step into the working world but companies are struggling to hire after a slate of taxes over the past couple of years, Hilton boss Stephen Cassidy said.

Cassidy added: ‘If we want businesses to invest in the next generation, we need policies that encourage employers to create more jobs and give young people the chance to prove what they can do.’

The report echoes the industry’s calls on Andy Burnham to ease the tax burden on hospitality.

Cassidy suggested the Government should introduce lower employer National Insurance Contributions for hospitality, a fundamental reform of business rates and a VAT cut for hospitality to 10 per cent to match rates in Europe

He also said a proposed ‘holiday tax’ visitor levy would make it harder for businesses to employ.

Researchers claimed that filling hospitality’s excess vacancies with young people could move around 33,600 into work and generate £2.3billion of economic benefit per year.

Former chancellor Rachel Reeves increased the employer National Insurance contribution rate from 13.8 per cent to 15 per cent and reduced the secondary threshold to £5,000.

This caused fury among hospitality firms because it dragged many part-time and lower-paid staff into the tax for the first time.

Allen Simpson, the chief executive of UK Hospitality, said that the NICs change was ‘the single biggest contribution to job losses we have seen in hospitality over the last two years’.

He said that a combination of lower NICs and VAT with reformed business rates would help to ‘return the thick end of 100,000 jobs’.

But without these policies, plus a visitor levy in England, the industry would be ‘looking at further job losses’, Simpson said.

UK Hospitality said the Budget on October 28 is a ‘moment for change’ where ministers should roll back policies that have disincentivised employment.

It said the Chancellor should rebalance the tax system to bring hospitality costs down, which will give businesses much-needed financial headroom, drive job creation and support high streets. 

Their remarks echo those of Asda boss Allan Leighton, who said that John Healey’s update should be a ‘tipping point’ to encourage growth.