As April begins, a new era dawns for hospitality, with a deluge of increased costs and an uncertain economic outlook threatening many business’s futures.
This month sees:
- increases in national minimum and living wages
- a rise in employers’ National Insurance contributions
- and a sharp reduction in business rates relief.
In the first three months of 2025, 303 pub businesses across England, Scotland, and Wales closed, according to CAMRA, the Campaign for Real Ale. A further 46 pubs have been converted to other uses.
“Hundreds of pubs have already stopped trading this year. How many more need to shut before the government takes notice?” asked CAMRA chairman Ash Corbett-Collins.
“With big increases in costs from higher National Insurance contributions starting this week, and hikes in business rates bills for pubs in England, too, it’s important for customers to remember that price hikes at the bar are the fault of the government, not hard-working publicans.”
He added: “Pubgoers are calling on the chancellor to look closely at the rate of pub closures between now and the Budget in the autumn, to think again on the employer National Insurance hike for pubs, and to cut rates of VAT and duty charged on beer and cider served in pubs.”
The Night Time Industries Association (NTIA) points out that, to survive, businesses have already made drastic cuts: reducing staff, limiting hours, and scaling back services. The latest financial hit could be the final push into insolvency for many.
The NTIA cites a poll of more than 200 businesses which found that nearly half (46%) of respondents expect their workforce to shrink within the next 12 months, while 62% anticipate having to reduce staff numbers and operating hours.
The overwhelming majority — 85% — identified rising operational costs as their biggest economic challenge. As a result, 88% of businesses plan to increase their prices in the next year, with more than half (56%) expecting price hikes of between five and 10% just to remain viable.
‘The final nail in the coffin for thousands’
“The government is sleepwalking into disaster,” said Michael Kill, chief executive of the NTIA. ”Businesses have cut everything they can — jobs, hours, services — just to survive, and yet they’re still being punished.
“These tax hikes will be the final nail in the coffin for thousands. The government has refused to listen, and now they are actively pushing businesses into collapse. If they do not act now, they will be responsible for the destruction of an entire sector, the loss of countless jobs, and the irreversible decline of our nightlife economy.”
Kate Nicholls, chief executive of UKHospitality, said: “The costs hitting hospitality this month are eye-watering, and the impacts it will have on businesses, teams and communities are stark…
“None of this helps the government’s ambitions to drive growth or get people back into work. It needs sectors like hospitality to achieve both of those goals, but with disjointed tax and welfare policies, that is looking more difficult than ever.
“Hospitality has the ability to generate socially productive growth and create jobs for everyone, everywhere, but this level of cost ties our hands behind our back.”
