Stephen Cassidy, the boss of hotel chain Hilton, has called on the government to cut taxes for hospitality firms to help tackle a £14.4 billion youth unemployment crisis.
A report by WPI Economics, commissioned by the hotel giant, found that one in four unemployed young people say their biggest barrier to getting a job is a lack of experience. This "experience gap" is costing the economy £14.4 billion, including lost tax revenue and additional benefits spending, the research found.
The same report found that giving one unemployed young person their first job generates more than £152,000 in economic value.
Cassidy said the government should "give young people the chance to prove what they can do."
Record numbers of young people out of work
There are now a record 13 per cent of 16 to 24-year-olds who are "not in education, employment, or training", a group known as NEETs. Around 400,000 of them are actively looking for work, according to figures from the Office for National Statistics.
Cassidy said the hospitality sector is uniquely placed to tackle the crisis by giving young Britons their first step into the world of work, but that companies have struggled to hire after a series of tax rises over the past couple of years.
"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," Cassidy said.
Calls to ease the tax burden
The report echoes the hospitality industry's calls on Andy Burnham to ease the tax burden on the sector.
Cassidy suggested the government should introduce lower employer National Insurance contributions for hospitality, a fundamental reform of business rates, and a cut in VAT for hospitality to 10 per cent to match rates seen elsewhere in Europe. Employer National Insurance is a payroll tax that funds state benefits and the NHS, while business rates are a property-based tax charged on the premises firms occupy.
He also said a proposed "holiday tax" visitor levy would make it harder for businesses to employ staff.
Thousands of jobs at stake
Researchers said filling hospitality's excess vacancies with young people could move around 33,600 people into work and generate £2.3 billion of economic benefit a year.
National Insurance changes under fire
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, the point at which employers start paying the tax, to £5,000.
The change caused fury among hospitality firms because it dragged many part-time and lower-paid staff into the tax for the first time.
Industry warns of more job losses
Allen Simpson, chief executive of UK Hospitality, said the National Insurance change was "the single biggest contribution to job losses we have seen in hospitality over the last two years."
He said a combination of lower National Insurance contributions and VAT, along with reformed business rates, would help "return the thick end of 100,000 jobs" to the sector. Without these policies, plus a visitor levy in England, the industry would be "looking at further job losses", Simpson said.
Budget seen as 'moment for change'
UK Hospitality, the trade body representing pubs, restaurants and hotels, said the Budget on October 28 is a "moment for change", when ministers should roll back policies that have disincentivised employment.
It said the chancellor should rebalance the tax system to bring hospitality costs down, giving businesses much-needed financial headroom, driving job creation and supporting high streets.
Their remarks echo those of Asda boss Allan Leighton, who said John Healey's update should be a "tipping point" to encourage growth.
