Changes to holiday entitlement will cost hospitality sector £240m, warns BHA

The British Hospitality Association has demanded that rises in the minimum wage over the next two years are "very modest" after the Government proposed increasing statutory holiday entitlement from 20 to 28 days.

Under the plans, part of the Work and Families Act, statutory annual leave entitlement would be increased in two stages, rising from 20 to 24 days on 1 October 2007, and from 24 to 28 days on 1 October 2008.

The Government said up to six million workers would benefit from an extra eight days holiday each year under the plans, designed to counter employers which include bank holidays in annual leave.

But the British Hospitality Association warned that the changes could cost the UK hospitality sector £240m. It said minimum wage rises should be restricted to help employers pay.

"The increase in minimum paid holidays was unopposed in Parliament and seems to have had wide public support, but its total annual cost across all industries, now estimated by the DTI at £4b, will further harm the UK's competitiveness," the BHA said today.

"We have made the Low Pay Commission well aware that, in these circumstances, its recommendations for minimum wage increases in both 2007 and 2008 will have to be very modest."

The DTI has launched a second public consultation on the implementation of the changes. But it will not consider BHA and CBI requests to give employers the ability to exchange the extra leave for extra pay if both sides agree.

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By Daniel Thomas

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