(3 years, 8 months ago)
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Selaine Saxby (North Devon) (Con)
I beg to move,
That this House has considered support for the hospitality industry throughout the covid-19 pandemic.
I thank the Backbench Business Committee for granting the debate, and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for co-sponsoring it. Without a doubt, the hospitality sector has been one of the hardest hit throughout the ongoing covid-19 pandemic. It will have been shut for 10 out of 14 months when it eventually reopens. I do not believe that many of us foresaw that a year ago when we entered the first lockdown.
Support for the sector is extensive across the House, as shown by the number of contributors today. This debate is almost as booked up as I understand much of the hospitality sector itself is, when allowed to reopen. With that in mind, I will keep my remarks brief and will not take interventions, to enable as many colleagues as possible to speak.
In 2019, the hospitality sector contributed £59.3 billion in gross value added to the UK economy—around 3% of total UK economic output. At the start of last year, there were almost a quarter of a million hospitality businesses in the UK. The sector is vital to my North Devon constituency, which is proud to boast 105 pubs, with almost 10% of all businesses being in the hospitality sector.
The latest research by UKHospitality shows that the sector will have lost £86 billion in revenue by the end of March 2021, down 68% on pre-pandemic figures. It would have been more were it not for the unprecedented support packages given by the Chancellor, combined with the innovation shown by the sector in adapting their businesses to become covid compliant, increase outdoor capacity, and become take-outs. Our North Devon “Take Out to Help Out” competition saw thousands of residents vote to support their favourite take-out that has helped them through lockdown, and many congratulations to the winner, Nartnapa Thai Kitchen in Lynton.
The sector is also wracked with coronavirus-related debt—an estimated £2 billion in rent debt and £6 billion in loans and other finance—which makes the recovery that bit more challenging. As someone who ran a debt-financed small business for 15 years, I know the toll that that type of balance sheet can take on small and medium-sized businesses, of which the sector has so many, and the extra pressure that it puts on achieving profitability, particularly for seasonal businesses that are so dependent on their summers to see them through the lean winter months.
Even assuming that the road map stays on track, the sector cannot fully reopen until 21 June. Some 60% of pubs may not reopen on 12 April, despite the Government’s relaxing regulations to enable them to trade outdoors more easily. That will mean that the support will taper off before there is a full return to profitability, which is forecast to take at least six months after the restrictions are fully removed. In short, the Government support may be ending too early relative to their lockdown-lifting road map.
This summer will no doubt be busy for UK hospitality. We know that pubs are one of the top three reasons tourists visit the UK, so their survival is linked to our inbound tourism and its associated economic benefits. As we move into winter, wet-led pubs in particular are very dependent on their locals returning to the bar, which we know did not happen to historical levels last winter. Going back to the pub is a much easier ask than so many of the others that we have endured over the last year, but have our behaviours fundamentally changed during the pandemic? I hope not, as in many rural villages in constituencies such as mine the pub is the heart and soul of the village. We need to ensure that they can return to their former vibrancy at last orders.
Calls are increasing for a review of beer duty to target support into our pubs, bars, and clubs, which could be balanced with duty rises in the off-trade, given the ever growing debt that the country is in. The Chancellor has shown throughout this pandemic how quickly he and his colleagues in the Treasury can pivot and adapt to create new lifelines for businesses. While I pay tribute to his excellent work, perhaps the job is not yet done for hospitality.
I believe that a draught beer duty would be targeted, quickly actioned support and could play a crucial role in stopping so many of our vibrant pubs and other hospitality businesses from going under later in the year. Our pubs provide a safer environment for alcohol consumption than elsewhere, and we should do all we can to encourage people to return safely as soon as possible.
There are now 600,000 fewer jobs in the sector than before covid hit our shores, despite the unprecedented support of furlough. As hospitality businesses look to reopen, I hope that they will engage with the new Government packages to get people back into work, such as the kickstart scheme, and reach out to their local Jobcentre Plus. I know that in rural North Devon, hospitality businesses have not always engaged with their local jobcentre, with local ads or posters in the window historically sufficing, but a wide range of highly qualified people are now unfortunately looking for work and vacancies may well be filled more rapidly through this route than those pre-pandemic.
There are other areas in the broader hospitality sector whose pandemic has also been problematic, such as our contract caterers and wholesalers. These businesses were not required to close, but their trade has been limited mostly to the public sector, and they have unfortunately missed out on many grant payments. Breweries, especially local microbreweries such as GT Ales in Wrafton, despite reinventing themselves for home delivery, have had a challenging time.
The wedding industry and its supply chain, quite rightly, have been repeatedly highlighted as a sector in need, the important big day being intricately linked with hospitality. It is estimated that more than 200,000 weddings have been either cancelled or postponed since the first lockdown and that the sector to date has lost at least £6.4 billion, a figure that continues to rise. It is fair to say that the hospitality sector has received an unprecedented level of support across VAT reductions, business rate holidays, grants, loans, the job retention scheme, the freezing of alcohol rates and a wealth of other measures.
I have been in contact with my local hospitality sector and the national hospitality sector throughout this pandemic, and I very much hope that dialogue will continue as we emerge and build back better. The Chancellor said that he would do “whatever it takes” and indeed he has, but to prevent our vital and much loved hospitality sector suffering from long covid, they may just need a little more creative support in the coming months.
Madam Deputy Speaker (Dame Rosie Winterton)
We now have a three-minute time limit on Back-Bench speeches. That will be on the screen in the Chamber and on screens virtually.
Jeff Smith (Manchester, Withington) (Lab)
For my three minutes, as the chair of the all-party parliamentary group for the night-time economy, I want to focus on the night-time hospitality sector, which has been pretty much completely closed for over a year, but which makes a massive contribution to our economy and our tourism sector. Our recent APPG inquiry looked at the effect of the pandemic on the night-time economy and we found that without urgent support, many nightlife businesses could be lost. We are at the critical point. Lots of venues have just about survived until now but they are racking up debts and they need help, so I want to raise five issues briefly.
First, on debt, many businesses will be in arrears for rent, utility and other costs by the time that they can reopen and, when they reopen, creditors will expect to be paid. We need a solution for that amassed commercial debt, whether that is a shared burden approach to debt, as we have seen elsewhere, or support for long-term restructuring so that debt does not need to be paid off until businesses are able to do so over the long term.
We need specific sector support for businesses that have been hit harder than in almost any other sector and will not be able to fully reopen straightaway, and for individuals. Disproportionate numbers in the hospitality and events sectors are self-employed. Many still fall into the gaps in support and there is a strong case for extending the job retention scheme for the hospitality industry until summer 2021.
We need support from the culture recovery fund. It is a great idea, but the culture recovery fund has had a limited impact on night-time venues. Of £1.57 billion, only 12 nightclub-type venues have received funds. These are cultural hubs at the heart of our city and town centres and we need to look at the criteria for future support.
On the reopening plan, the Government set out a road map to reopening, which is welcome, but venues need to be able to open at the capacity that makes them viable, so it is important that the Government work quickly with the sector on testing or other mitigations that can allow venues to open. I am worried that the test events that are part of the events research programme are not fully worked up yet. To make that happen, there has to be close partnership with the industry as soon as possible.
Finally, security is a key challenge for the sector, and I do not think that has yet been fully recognised. Because of covid, lots of security professionals have had to look for alternative jobs and many do not want to risk coming back to an uncertain future. Six in 10 late-night door supervisor positions are at risk of not being filled. That is important because venues rely on them to fulfil their licence requirements and cannot open without them. There will be high demand for the small numbers of door staff and we need to look at support and a solution.
I just have time to mention event cancellation insurance. Without a Government-backed insurance scheme, many festivals and big events will cancel this summer. France, Holland, Austria, Switzerland and Germany have all introduced some sort of Government-backed scheme. We need one to protect our world-leading events.
Nightclubs and music venues bring joy and a sense of community to our cities and towns. We cannot let these vital businesses fold. It jeopardises our wider economic recovery and leads to a massive cultural as well as economic loss to our country.
Kate Griffiths (Burton) (Con) [V]
I thank my hon. Friend the Member for North Devon (Selaine Saxby) for securing this important debate, and I agree with the many important points that she made. The unprecedented support that this Government have provided to hospitality businesses over the past year has undoubtedly saved many jobs and livelihoods across my constituency of Burton and Uttoxeter. However, there is still much more that can be done to help this industry recover from the biggest crisis that it has ever suffered.
Over the past few years, we have seen the slow decline of our high streets, as habits have changed and online shopping has taken over. We must not allow the same thing to happen to our community pubs and the breweries that support them. Supermarkets have stayed open and continued to meet the needs of shoppers during this period of lockdown, but as we follow the road map and restrictions ease, we must ensure that our local pubs are able and willing to welcome us back.
My hon. Friend the Minister will be aware of the high street’s “Shop Local” campaign, but will he support Carling’s campaign to “Support Your Local”? As colleagues will know, I am proud to represent the historic brewing town of Burton-on-Trent, where Carling is brewed by local people. The campaign highlights the role of the local pub—a place where old stories are remembered and new ones are made, and the best place for a nice cold pint, but much more than that, a place that is at the heart of our communities.
Pubs play a huge role in all our constituencies. They provide significant employment opportunities for young adults and are at the centre of our towns and villages. In Burton, pubs and breweries take centre stage in our town’s heritage. Over the past year, they have been working tirelessly to ensure that they keep customers safe, and so many have gone beyond their usual remit to support their communities throughout the pandemic.
The £352 billion package of support provided by the Government, including for the hospitality industry, has ensured that the sector has survived the difficulties of the past year, but we must recognise the wider role that the British pub plays in our communities and ensure that pubs not only survive but thrive in our neighbourhoods, supporting jobs and growth in local areas.
The Chancellor announced that beer duty would be frozen this year, but I urge the Minister to look at the benefits of a new draught-beer duty rate specifically targeting wet-led community pubs and breweries, which have not been recipients under other policies. Many pubs and bars are in a perilous financial position, and many will not survive without help. I hope that, during the forthcoming review of alcohol duty, the Minister will reflect on these arguments and help to level the playing field between the price of beer sold in social community settings and cheap supermarket alcohol consumed at home.
Adam Holloway (Gravesham) (Con)
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing this important debate. I will make just a couple of points, on dates and on data.
Earlier this afternoon, I rang a friend who runs the Griffin Inn in Sussex to ask about this, and he said that dates are vital. We must stick to any dates that we have. Over Christmas, of course, many establishments lost enormous amounts of money buying in stock that they then could not use. In his case, I think it was £25,000-worth of stuff.
On data, some people are having a very good time of it. Supermarkets are making a fortune. Pubs and hospitality have been amazingly supported by the Government, but we must not forget the point made by Ian Eldridge, who runs a restaurant in my constituency called Bartellas, that they still have enormous costs. They have employer contributions, lease purchase deals and lots of monthly contracts, and of course they also have maintenance.
My second point on data is a plea to the Minister and, indeed, the Prime Minister: things do seem to be going, thank God, in a very good direction in terms of hospitalisation and deaths, and if we can unlock hospitality earlier, let us not be dogmatic about it—let us do it. Let us reopen well-run hospitality, because I would much prefer my constituents to be drinking there than cramped in their front rooms.
Ben Lake (Ceredigion) (PC)
Like others, I congratulate the hon. Member for North Devon (Selaine Saxby) on securing this very important debate.
I agree with a lot of the points that have been made by hon. Members who have spoken, but would like to add a few more. Despite the unprecedented support from every level of government, including the Welsh Government and local authorities, yesterday’s Office for National Statistics data offered quite a sobering reminder of the devastating impact that the pandemic continues to have on businesses and employment in Wales. A year into lockdown, the Welsh unemployment rate has risen by 1.1%, while Wales’s perennially high economic inactivity rate has reached 24.4%, meaning that a quarter of the Welsh workforce is either not in employment or not seeking employment. I hope this debate will be a helpful reminder to Government of the importance of the hospitality sector both as an opportunity for jobs and for the way in which it helps particular regions, particularly coastal and rural areas, where other opportunities are sadly fewer and further between.
Before the pandemic, the hospitality sector contributed £59.3 billion to the UK economy and employed over 2.3 million workers across the UK. That in itself speaks for the significant contribution that the sector makes, but it was also an important gateway into the labour market for younger workers, with approximately one in 14 young adults employed in the pub and brewing sector alone. This sector is particularly important in rural areas such as my constituency of Ceredigion, where approximately 4,500 people, or 17% of the local workforce, are employed directly by the hospitality sector. It is worth noting that the sector, through local procurement and purchases from wholesalers such as Harlech Foodservice and Castell Howell, plays an important role in supporting the wider economy and rural incomes. Businesses in the hospitality supply chain, from food wholesalers and breweries to culinary suppliers and contract caterers, have not received as much attention, but they are essential for the success of the sector and should be supported by the Government.
While this month’s Budget contained several welcome measures for hospitality, I again urge the Chancellor to extend the 5% rate of VAT to the full financial year rather than six months and to consider proposals for a specific draught-beer duty to encourage on-premises consumption—a point that has been made very effectively by other hon. Members. Such measures would help to ensure that hospitality businesses can make the most of the upcoming summer season. Hopefully we can all look forward to a summer of unlocking. With potentially several months of restrictions, in various forms, to come, I urge the Government to be attentive to the needs of hospitality as a pivotal employer and significant economic multiplier. Particularly for those people in areas hardest hit by the pandemic, its survival is essential for post-pandemic recovery.
Holly Mumby-Croft (Scunthorpe) (Con) [V]
I thank my hon. Friend the Member for North Devon (Selaine Saxby) for securing this debate.
There is no doubt that it is thanks to the Government’s support schemes that we have been able to prevent many local hospitality businesses from being lost. Having worked with hundreds of them, I know that local businesses always have their employees and our community at heart. In turn, we in North Lincs value them and their ties with the community, with places like Mulligans Sports Bar sponsoring local darts, snooker and pool teams. Many of my local hospitality businesses did not let a pandemic stand in the way of their helping people. I could list many examples our area can be proud of. For example, the hospital’s sports and social club opened up space for NHS staff to use for meetings. The Shires and many, many other pubs have provided hot food options for those at home. Pubs such as the Queen’s Head in Kirton have provided lunch for volunteers and health workers in our vaccination centre.
Many local hotels provided accommodation to NHS workers and worked with North Lincolnshire Council to provide a place to stay for those who faced homelessness. Many businesses were able to innovate. The Black Door in Scunthorpe, for example, has worked to share its door-to-door cocktails idea with businesses across the country. Many venues started offering takeaway and delivery options. Some even generously offered their space for vaccinations to take place. Venues such as the Old School in Messingham kept us really entertained with their uplifting social media posts. After a long, imposed state of slumber, hospitality businesses in Scunthorpe are raring to open. From Hibaldstow to Ashby, from Bottesford to Howsham, local business owners are preparing their teams and their premises to go back to work—but they still need help.
Moving forward, I urge the Government to continue to carefully review existing restrictions, ending them as soon as we can. I once again urge Ministers to provide further guidelines for the weddings industry, to allow socially distanced on-site look-arounds at places such as beautiful Cleatham Hall in my constituency, where there is space to operate safely. I ask Ministers to review support for kennels and catteries; to open up the kickstart scheme for long-standing clubs; and to consider suggestions for draught-beer duty relief. I welcome the expansion of the self-employment income support scheme eligibility criteria, but I hope that Ministers can work with colleagues in the Treasury to bring forward the date on which the fourth grants can be awarded, as many self-employed in my area need this support now.
Thanks to the incredible support package and some real northern grit, many hospitality businesses in my area are still with us. They are now pumping up the tyres at the speedway, stocking up the fridges in our restaurants, and polishing their pint glasses in our pubs. We must continue to support them so that on this beautiful spring day, we really can look forward to brighter months ahead, and a chance to build back these valued businesses in Scunthorpe.
Abena Oppong-Asare (Erith and Thamesmead) (Lab) [V]
Hospitality businesses in my constituency have had an enormously difficult year: not only have they been closed for many months, but when they have been allowed to open, they have faced a constantly changing set of rules and regulations. Many have not received the financial support they needed from the Government, and many are fearful for their future. I only have time to mention a couple of them, but their struggles are shared by countless other businesses across my constituency.
In December of last year, I visited the Abbey Arms in Abbey Wood as part of small business Saturday. Staff there told me about the challenges they faced and their uncertainty about the future. Of course, not long after that, all pubs were once again required to close. Other pub owners in my constituency have contacted me, including the owners of The Duchess of Kent in Erith and The Victoria in Belvedere. They need assurances from the Government that they will be treated fairly in the future and provided with support to reopen. The coming months will be particularly difficult for pubs and other venues with no outdoor space. Can the Minister set out what he will do to help these businesses? A great number of my constituents are rightly concerned about the future of their local pubs. Pubs are centres of our communities, and the Government urgently need to set out how they will help pubs not just to reopen, but to thrive, in the coming months and years.
The wedding and events sector has been extremely hard hit. Local family businesses have had to fight to survive over the past year, as nearly all their usual business has disappeared. Many businesses in the events sector have been repeatedly refused grant funding by Bexley council, which cites the Government’s tight criteria. These are businesses that have been allowed to fall through the cracks. The Government must look again at what more funding can be provided to help these businesses restart as restrictions allow. Of course, behind each of these businesses are people who have taken risks to start small businesses and contribute to our economy, our community, the people they employ and the supply chain of which they are part.
Hospitality workers are disproportionately likely to be women or from an ethnic minority background, and just this week, the Office for National Statistics published statistics showing that people under 25 account for 60% of the jobs lost since February 2020. The human toll of the pandemic has taken many forms, but we must not forget those who have lost their jobs or their businesses. We need action from the Government right now to ensure the hospitality industry is properly supported.
Mick Whitley (Birkenhead) (Lab) [V]
I draw the attention of the House to my entry in the Register of Members’ Financial Interests.
At long last, we find ourselves in the final stretch of the long war with covid-19. Thanks to the tireless efforts of NHS staff and volunteers, vaccination rates are soaring, and many of us are now eagerly looking forward to the gradual relaxation of lockdown measures and the reopening of shops, cafés, restaurants and pubs. However, for much of the hospitality industry, the next few months will be fraught with uncertainty and worry. Independent businesses up and down our high streets are in the midst of an intense cash crisis. Grants and loans have been exhausted; proprietors are being forced to defer bills and mortgage payments; over half of businesses in the accommodation and food services industry have just three months’ cash reserves; and many small businesses find themselves burdened with unmanageable levels of debt that could well sink our economic recovery. Once again, this Government are failing to do what is needed to protect the hospitality industry.
Time and again I have called in the House for a comprehensive package of support that gives owners and workers much needed security and peace of mind in the challenging months ahead. Instead, all this Government have delivered are piecemeal measures that have left much of the hospitality industry barely able to keep its head above water. Businesses today have access to lower levels of financial support than they did at the start of the pandemic, despite finding themselves in far more severe financial trouble. The Government were far too late in extending the furlough scheme and business rate relief—a delay that needlessly cost jobs. The March Budget contained no measures whatsoever to assist small businesses with much-needed debt restructuring.
The impact on workers has been devastating. Prior to the pandemic, more than 3 million people—8% of the entire UK workforce—worked in hospitality. Over the last year, a wave of redundancies has swept the sector, with the youngest and lowest-paid workers bearing the brunt. Our economic recovery will be built on the backs of small businesses and our local high streets. We now need decisive action that gives independent businesses confidence in the future, and safeguards people’s livelihoods.
That is why Labour is calling for an ambitious high streets fightback fund that will give much-needed assistance to those businesses that have been most devastated by the pandemic. Labour’s plans will stop small to medium-sized enterprises being swallowed by a black hole of debt, by allowing businesses to start repaying Government loans only when they begin to grow again. Businesses must also be allowed to convert debts into employee ownership trusts, giving workers a real stake in the future of their workplaces. We must also create the conditions that allow local shops to compete with online retailers on a more equal footing, and give local authorities the powers they need to fill empty units as a means of revitalising our neglected high streets. Finally, we need action to tackle the scourge of low pay and insecure work that has plagued the hospitality industry for far too long. That means ensuring that every employee is paid at least the minimum wage and has a guaranteed number of hours each week.
Mark Pawsey (Rugby) (Con)
May I draw the House’s attention to my entry in the Register of Members’ Financial Interests? My hon. Friend the Member for North Devon (Selaine Saxby) has eloquently set out the substantial measures that the Government have put in place to support the hospitality industry, but where a sector is affected, there is also a massive impact on its supply chain. Over the past eight months, consumers have purchased their food in supermarkets. They have moved from out-of-home to in-home consumption, and supermarkets have done well, especially those selling foods, wines and beers that were previously available only at people’s local pub or restaurant.
There is an assumption that suppliers to the hospitality industry have been able to pivot to create products for the retail sector, but that is not the case. Many product lines are dedicated to hospitality, which has led to many suppliers losing stock through its going out of date and being wasted. Large quantities of cask ales have been poured away. Even when goods are not date-sensitive there are seasonal stocks, and suppliers have found that capital has been tied up in stock in warehouse space.
Wholesale suppliers work in high-volume, low-margin businesses with high fixed costs, meaning that a small fall in sales has a disproportionate impact on profitability. Many suppliers also have the challenge of customers who are unable to pay. Cash sales from one period are often used to pay suppliers for goods delivered in the previous period, and to that extent, many suppliers to the hospitality sector are acting as banks and funding their customers. Suppliers are unable to take action if a hospitality business simply does not have the cash.
I do not call for specific support for suppliers. The best outcome for suppliers is for their customers, and the hospitality sector, to get trading again. The road map out of lockdown gives us the date of 12 April for reopening outdoor hospitality, but that will be available only to limited outlets, such as those with pub gardens or big areas of pavement space in front of them. Therefore, 17 May, when indoor hospitality opens, will be a much more significant date. We know from previous experience that hospitality businesses can put in place measures to keep customers safe. They still have screens, which are often still in place, and they are ready with supplies of sanitiser and wipes.
The key date of 21 June is when all restrictions will be lifted. Some are calling for the dates to come forward. I think that certainty is more important than doing it early. All businesses need time to get their plans in place, so let us give them that certainty. I ran a business, and I do not see how it is possible to manage a business without knowing when the customers will be there to receive the goods. The hospitality sector is looking forward to getting back to business, serving its customers, getting staff back into work, helping to get the economy moving again, rebuilding its supply chain and bringing people together, which it can do in a safe and secure manner.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I thank the hon. Member for North Devon (Selaine Saxby) for securing the debate. First, I want to mention a business in the town of Tain in my constituency called Platform 1864, which is a restaurant and pub run by a man called Graham Rooney. Graham Rooney started some years ago with absolutely nothing—not two beans to rub together—and he built the business up. He is a damn good chef. Then the pandemic hit, and we thought, “What’s going to happen to poor Graham?” It was exactly as the hon. Member for Scunthorpe (Holly Mumby-Croft) said: he went into the takeaway business. People go online, order their scoff, and then he delivers it. My mouth waters when I think of his roast beef and Yorkshire pud, and my wife loves his prawn paella. He has traded his way out of the situation.
Jamie Stone
There is nothing like a free advert in the House of Commons—whether I will get a free takeaway, I rather doubt; we shall see.
My constituency depends on the tourism industry, and the tourism industry depends on the hospitality industry. We have been in terror of any one of these businesses shutting down forever, because if that were to happen, it would impoverish the tourism product that we offer to visitors. The visitors would then say, “It’s not so much fun coming,” and they will not come, and we could end up in a downward spiral. Keeping these businesses going is utterly crucial.
I will conclude by mentioning another business, this time in the north of my constituency: Mackays Hotel in Wick. It is a great and famous old hotel, and it is owned by a man called Murray Lamont. He has been very wise in the way he has conducted himself. I would ring him up every so often during the pandemic to ask, “How’s it going, Murray?” He is a brave man; he would say, “We’re going to get through this.” I so admire the spirit of people like Graham Rooney and Murray Lamont.
Murray has four things that he wants me to mention in the Chamber. First, let us not shut off the reduced VAT rate too soon, because it is a life saver; I give thanks to the Government where it is due. Secondly, clarity on rules about reopening and travel would be invaluable. Where the Scottish Government are saying one thing and the UK Government are saying another—and sometimes we wonder whether it is done to deliberately contradict the UK Government—that is not helpful. Thirdly, a package for capital investment would be helpful. Finally, we need to get back into training, because too many people are leaving the profession, and the profession will be denuded if it cannot offer the standard of cooking, service and so on. Let us hope we get through this pandemic, which we surely will, and let us hope we have a vibrant hospitality business to hit the ground running when the time comes.
Simon Jupp (East Devon) (Con) [V]
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing this important debate. I am a Devonian born and bred. When I think about my home county, I think about the breath-taking views on the south-west coast path. I think of the vast swathes of the Jurassic coast, rolling countryside, Georgian seaside towns and beautiful villages stretching from Sidmouth to Exmouth. But not just the views make me smile. The warm welcome that visitors receive in our towns and villages—in the cafés, pubs, restaurants and hotels—also makes me smile.
The hospitality industry is the lifeblood of East Devon’s towns and villages, which I am incredibly proud to represent. There is no doubt that, without the financial support the Government have provided, many of the places that residents and visitors enjoy simply would not be around to reopen their doors. That financial support kept staff on the books, helped pay the rent and paused other payments and bills. I am pleased that the Government will inject extra cash into the industry with restart grants, as well as extending cuts to VAT and business rates. We must continue to recognise how vital the hospitality industry is and consider further steps to help the sector.
Everyone who works in the industry is an ambassador for both my county and our country. Straight after the Budget, I joined a call with hotel owners in Sidmouth, who welcomed the measures that the Chancellor announced. However, recruitment and retention remain a challenge. It is quite right that the Government want businesses to invest in their domestic workforce—to train them up and improve local skills—but it is also about getting across the message that hospitality is a skilled and rewarding career.
Working in hospitality involves a positive attitude and a strong work ethic. Many locally who started out in hospitality by taking a seasonal job to earn some extra money have risen to become integral parts of the management teams in their venues, or have started new ventures with experience that they gained. I will continue to work on this issue with businesses in East Devon and to look at ways the Government can ensure that the new, fairer immigration system works for them.
I have lost count of the number of times that I have raised the need for continued financial support for the hospitality industry with Ministers and on the Floor of the House. I am glad they heard the calls and responded in the Budget. People should have every confidence that they can go back into cafés, pubs, restaurants and hotels when they reopen, whether to meet friends and family or to have a quiet drink after what has been an exceptionally difficult year for us all. I am sure everyone will be welcomed safely back to East Devon.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I thank my co-sponsor of this debate, the hon. Member for North Devon (Selaine Saxby), for her excellent opening speech.
The hospitality sector is where we celebrate, mourn, catch up, hold work and community events, raise money for good causes, or just grab a bite when there is no time to cook or when we are travelling. Hounslow borough has 630 hospitality sector businesses—restaurants and cafés, pubs and bars, hotels and many more. Some have been able to open for some of the pandemic, but others—particularly wet-led pubs, wedding caterers, large events venues and party organisers—have been completely closed for the majority of the time. The pandemic has had a huge impact on the whole sector, and many businesses may not reopen.
The pandemic and the uncertain future falls hard on the low-paid, who dominate the hospitality sector, as do the under-25s. Hospitality workers are more likely to have lost their jobs than have been furloughed, so they make up a significant proportion of the skyrocketing number of universal credit claims—there are more than 17,000 claimants in my constituency. Behind each one of our hospitality businesses are many others in the supply chain: from companies that provide towels and cleaning to taxis, musicians, event organisers, wholesale food suppliers and many more—businesses that have missed out on most of the covid relief schemes.
Until a year ago, the hotels in Hounslow and west London, being close to Heathrow, were full to the brim. However, the huge drop in international travel and the travel and tourism sector has had a huge impact, including for a business in Isleworth that makes airline food and has written to me. Again, I urge the Government to provide aviation communities such as Hounslow with the support that they desperately need.
Across the whole hospitality sector we are seeing great, viable businesses that are on the brink or have gone under because of the lack of timely and adequate support. I do wonder whether anyone in the Government has ever run a business anything like the ones that Members are concerned about.
By contrast, I pay tribute to the work done by Hounslow Council to support businesses in the hospitality sector. The council has developed a hospitality reopening safely toolkit; provided face-to-face business support to help with the reviewing and adaptation of premises; run recover and regrow courses online, which have built resilience; and helped to showcase the Shop Safe, Shop Local campaign, which has encouraged people to support our amazing local independent businesses.
I hope the Government will promise to listen to those in the sector and give them a clear and long-term plan, as the hon. Member for Rugby (Mark Pawsey) said. They should bring in many of the other elements described today by Members such as my hon. Friend the Member for Manchester, Withington (Jeff Smith), so that we can move forward to what are hopefully better days for the sector.
Jane Stevenson (Wolverhampton North East) (Con) [V]
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing this debate and thank her for doing so.
The past 12 months have made us all appreciate things that we took for granted, and many of us are now desperate to get back to our hospitality sector. Whether it is our local pub or coffee shop or the favourite meal that we always order at the same restaurant, there can be no doubt that we have all missed such simple pleasures.
Our hospitality sector has been amazing over the past 12 months. As restrictions changed and came and went, businesses jumped through hoops to keep their staff safe and to welcome customers safely. They should be highly commended for that effort. Many have adapted their services, morphing into takeaway food outlets or offering home deliveries of afternoon teas or Sunday roasts. Even though times were bad for them, many still found time to help others, and I want to make special mention of the landlord of the Ashmore Inn, Kevin Ward, who set up a food bank in Ashmore Park. When I visited the Ashmore Inn, I was struck by Kevin’s typical Black Country spirit of helping other people and of community. The sense of community we have in our pubs in Wolverhampton and in the wider Black Country is something very special. In my maiden speech, I spoke of an epidemic of loneliness as our society changed and this is one reason I cherish our pubs, as lifelong friendships flourish. I talk to so many older people who have drunk in the same pub with the same group of friends for decades.
Although on occasion I did take issue in this place with the level of support to our wet-led pubs, I would like to thank the Government for the wide range of schemes to support our hospitality industry—there are too many to list. I also want to welcome the welcome back fund. Wolverhampton has secured £230,000 to get high streets and our city centre ready for summer and really help our hospitality industry to recover. I gently ask, as my hon. Friend the Member for North Devon did, that dialogue continues with industry bodies such as UKHospitality, CAMRA—the Campaign for Real Ale—the Society of Independent Brewers and the BFBi, based in my constituency, so that we can continue to look for any more help that might be needed, whether through extensions to VAT cuts, measures on business rates or other means. I have written to the Chancellor asking him to consider a cut in duty for beer served in pubs. That could be entirely funded by adding a small cost to beer purchased in supermarkets.
Despite the awful time for hospitality, I am an optimist. With the vaccination programme rolling out and summer coming, I look forward to getting back to one of the many fantastic restaurants, cafés and pubs in Wolverhampton.
Rebecca Long Bailey (Salford and Eccles) (Lab) [V]
Pre covid, the number of people who worked in Greater Manchester’s night-time economy alone stood at 414,000, which is 33% of Greater Manchester’s workforce, but as the rest of the country emerged from the first lockdown last year Greater Manchester was quickly propelled back into restrictions, with limited financial support. Half of businesses now do not expect to break even until the end of 2021. The insolvency risk has grown month on month in the sector and is now at its highest point since at least April 2020. UKHospitality predicts that a failure to act now to solve the rent crisis could trigger thousands of hospitality businesses to fail across the UK.
So what must the Government do? There are a few urgent steps they could take today. First, they could ensure that the millions still excluded from Government support receive financial support equivalent to the self-employment income support scheme and that this support is backdated. Secondly, they could provide Government-backed insurance and event cancellation insurance to give businesses and events full confidence to reopen and plan for the future when restrictions lift. Thirdly, they could provide an urgent and significant sector support package for hospitality, events and tourism, including a Government-backed solution to spiralling rent and commercial debt arrears, and revisit the business rates cap, which unfairly penalises large numbers of hospitality businesses, which will find themselves paying full rates just days after restrictions are fully lifted in June.
Fourthly, the Government could protect local brewers and micro-pubs by stopping the tax hike in proposed changes to the small brewers relief and review beer duty. Lastly, they could protect workers by ensuring that the furlough scheme can run for as long as it is needed; increasing statutory sick pay to a level that people can actually live on; and setting up a hospitality commission to identify a sector recovery plan as well as investigate unscrupulous and exploitative practices where they are found in the industry, such as fire and rehire and the denigration of employment terms.
All we ask for in Greater Manchester is the ability to protect jobs and income while we keep people safe and get back on our feet. So if the Government want to back their levelling-up rhetoric with real action, they will provide the economic support our workers and businesses need.
Sir Robert Syms (Poole) (Con)
I, too, congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing this debate. We all know that, in the west country, hospitality is very important. It is responsible for many, many jobs. How quickly we get back to normal will depend on what levels of unemployment we have in our constituencies. I commend the Government for what they have done. When they had to work rapidly on the schemes to support people—whether it be the furlough scheme or the self-employment grant—they did so very efficiently. The whole British Government have been more functional and more efficient than I might have thought before the start of this crisis. When they have had to act, they have done so quite swiftly.
Where I have a slight difference with the British Government, which is why my voting record on one or two occasions has not been wholly in line with lockdown, is that I am still not convinced that hospitality and non-essential retail are as big a problem as the Scientific Advisory Group for Emergencies and others have suggested. Many of these businesses were running in the summer in a very covid-friendly way—many were encouraged to invest in being covid-safe. I still believe that they are a soft target that has been closed down too quickly.
The Government could make amends by looking at the data, considering the situation and, perhaps, speeding up the opening up of hospitality. There are some big groups in hospitality, but there are also an awful lot of small businesses. There are some people who retire on a pension to run a pub or a restaurant which is really a labour of love as much as it is a profitable business. We need to get them open and functioning as quickly as possible.
I welcome the fact that pubs and restaurants will be able to open up outside on 12 April, but, looking at the data, I cannot see why they should have to wait a further five weeks before taking on inside trade. It is even longer for hotels and other parts of the sector.
My call on the Government today is to look at the data. With the vaccination programme going the way that it is—fingers crossed that that continues—we could get hospitality open very quickly. Everything is interdependent. The shopping areas in my constituency do best when there are pubs, bars and restaurants nearby, and pubs, bars and restaurants do best when the shopping areas are open. The area also does well when the caravan sites are open, which, thank goodness, they will be on 12 April, because that brings in thousands of people. Therefore, if we take out a whole sector, it has a major impact on the community.
The hospitality sector is important for jobs, particularly for young people who have suffered during this pandemic. We need to nurse this area back to health and I hope that the Government do so by speeding up the unlock and getting people back to business.
Giles Watling (Clacton) (Con) [V]
I send my thanks to my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this important debate.
My constituency of Clacton is all about tourism. Much of it was created for tourism. Hospitality is the cornerstone of our tourism offer, employing thousands of people and delivering hundreds of millions of pounds to the economy. Hospitality businesses—be they bed and breakfasts, hotels, cafés, bars, or pubs—can be found up and down our sunshine coast. In fact, according to the results of my recent covid recovery survey, for which I had a very good response and I thank everyone for responding to it, some 20% of our local businesses are in hospitality. Those businesses are full of hard-working staff who always offer fantastic service and a very warm welcome. They help to make Clacton the wonderful place that it is and I thank them for that.
Throughout the pandemic, it has been incredibly important to me to ensure that those businesses had all the support that we could get for them. The Government have stepped up to the plate over the past 12 months and Tendring District Council has been brilliant at delivering the new funding, alongside its own discretionary schemes. I know that the business rates holiday, the VAT cut extension and the new business loans have particularly benefited, and will continue to benefit, our hospitality businesses. The furlough and the self-employment income support schemes have also helped many individuals. These have been positive interventions and I have no doubt that they will continue until some form of normality is resumed.
Thankfully, with the success of the vaccine roll-out, it looks like we might be back to normality at the end of lockdown. Now we need to ensure that our hospitality businesses are ready to take advantage of the new opportunities that I am sure will come. I think that we will have a massive influx of domestic visitors to the Clacton constituency this year. Our local destinations are already reporting a surge in demand for this summer as staycations are, unsurprisingly, proving popular again. Clacton’s beaches are, I think, the closest to London and the best. No hospitality business can afford to miss out on the opportunities that this influx will present, which is why the new restart grants will be so crucial. They will help our hospitality businesses to open safely—and safety is a key word. Although I welcome this potential influx, I ask that people act responsibly. If tourism businesses spend the money and open safely, people must respect that and act accordingly.
Speaking of support schemes, it is important that the Government’s work to help our arts, culture and sports institutions is recognised. We now have an additional £700 million to help these attractions as they reopen. One last word: please, please, we must get that beer differential to support on-sales, otherwise we might lose pubs again.
Ian Paisley (North Antrim) (DUP)
I, too, congratulate the hon. Member for North Devon (Selaine Saxby) on her excellent speech introducing this important matter, which affects all our constituencies and our economy.
I think we are all looking forward to the unlocking of hospitality. Personally, I am looking forward to attending a three times postponed Van the Man concert at the Europa Hotel in Belfast in June, and then—the following weekend—attending the wedding of my best friend Stuart and his beloved Rachel; that’s me getting invited to it now, Madam Deputy Speaker.
As many Members have already mentioned, the wedding industry has been under immense pressure and it is important that it is supported by the Government in a very practical way. The hospitality sector is a key economic driver across the entirety of the UK. Indeed, my constituency regularly attracts over 1 million out-of-state visitors to the Giant’s Causeway and the North Antrim coast annually. That is a significant driver for our economy. Hotels from Ballycastle to Ballymena, restaurants and all sorts of other facilities are a key part of that employment cycle, and they all need support. Hospitality is Northern Ireland’s fourth largest private sector employer. It has a £2 billion turnover and purchases a third of all Northern Ireland’s agrifood productivity, so it is essential in driving the cycle of our economy. Two thirds of our entire tourism spend comes from hospitality. In the past 12 months, 70 million drinks and 60 million meals have gone unserved as a result of the lockdown. Debts of over £1 million a day are stacking up; £1.4 billion is the loss so far—and counting—to the income of those businesses.
We need four things. First, we urgently need a fixed date for the opening of our sector. We do not have one at all in Northern Ireland, and that needs to be flagged up immediately. I understand that Scotland and England at least have a date. Secondly, we need flexibility on furlough. Thirdly, debt is a massive issue; the Government must back a loan scheme that allows for the consolidation of the debts accrued and a flexible payback system. Fourthly, local government needs flexibility over how it spends money. Tourism Northern Ireland actually handed back to Westminster £5 million in the last few months because we do not have the flexibility to reallocate that money to the areas for which the bid was originally made. The Secretary of State is prepared to put his nose into all sorts of matters in Northern Ireland. Put your nose into that matter, Minister, and fix that. Let us have the flexibility over those moneys and let us fix this sector.
Patricia Gibson (North Ayrshire and Arran) (SNP) [V]
This pandemic has posed challenges for all of us and for every business, not least the hospitality sector. This very important but beleaguered industry—the third largest employer across the UK—will take some time to recover from this health pandemic. Parts of the industry are on the verge of collapse and it was a mistake for the UK Government not to provide the kind of sector-specific support that it so desperately needed. The VAT cut is welcome, but the industry faces a cliff-edge in September, which could prove a death-knell to those barely hanging on. The importance of extending the VAT cut until at least the end of the year must not be overlooked if we want to save as many businesses and jobs in the sector as possible. Many hospitality businesses operate on a seasonal basis, and therefore may have to wait until next year before their balance sheet starts to begin to look healthy again.
Despite my repeated representations, no consideration has been given to the unique challenges facing operators of hospitality businesses in island communities—such as Arran in my constituency, which has at times during this pandemic been subject to higher restriction levels than mainland communities—which are concerned that islands may not necessarily be able to exit the pandemic at the same time as mainland communities.
The Scottish Government are doing all they can with the limited powers they have, and their year-long hospitality rates relief remains more generous than the three-month relief offered in England. Indeed, Scotland has the most generous non-domestic rates regime in the UK, but we also need business interruption loan schemes to be converted into grants, something I called for last April, in order to save businesses and jobs. The pressing need for that grows by the day. From April the hospitality sector, already on its knees, will be expected to repay these loans, however gradually, and it is clear that many businesses in the sector will be unable to do so and will only add to the debt and job crisis that we face. So I ask the Minister: extend the VAT cut until at least the end of the year. Look at what additional support can be given to our island communities, given their unique circumstances. Convert business interruption loans to grants and continue furlough for as long as restrictions remain in place. The UK Government surely understand the need to avoid business failures across the sector, as well as mass job losses. That does not need to happen, and I urge the Minister to do all he can to help us avoid that outcome.
Madam Deputy Speaker (Dame Eleanor Laing)
Thank you. How we wish we could really go to Ayrshire—well, at least I do. But now we go to Cheadle, and Mary Robinson.
Mary Robinson (Cheadle) (Con)
Thank you, Madam Deputy Speaker, and welcome to Cheadle.
I am glad to thank my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate and giving us the opportunity to reflect on the difficulties that hospitality has faced during the pandemic. Those difficulties have been particularly hard-felt by businesses in areas such as Greater Manchester, which were placed under local restrictions and in higher tiers during the autumn, and have suffered for longer. The Government’s unprecedented support has certainly been welcomed, with the bounce back loan scheme, the coronavirus business interruption loan scheme and the furlough scheme, which have been lifelines for many; but we must now look forward and ensure that hospitality recovers and thrives as we emerge from the pandemic.
The wedding sector in particular has faced—and still faces—unique challenges, and the end remains some way off. While weddings in non-exceptional circumstances will be allowed from Monday, only six people including the couple will be able to attend, and outdoor receptions with more than 30 guests and any indoor receptions must wait until at least 21 June. Even sporting events and concerts could get a head-start on them.
Couples have understandably been reluctant to confirm wedding dates, fearing that the 21 June date might get delayed, leading some wedding businesses to say that there is no light at the end of the tunnel. All this is causing a backlog of weddings, and a demand that will need to be accommodated. For wedding venues it is not just about getting back to normal; it is about going faster than normal, so that couples do not have to wait years for their big day.
One possible solution I would like to put forward is for more early weekday weddings. We know that Mondays to Wednesdays are traditionally less popular days to tie the knot, so, just like with the Eat Out to Help Out scheme, could the Government consider support to encourage early weekday weddings?
It is vital that we help this unique part of the hospitality sector recover from the pandemic because it serves such an important social purpose. Weddings bring together families and communities that for the last year have only been able to see each other and gather online; and the marriages they celebrate are the foundation of our families and our society. That is also why it is so important that when weddings come back, they come back for good. Large gatherings would be the first casualties of any resurgence in covid cases, so it is vital for wedding venues that we get this virus firmly under control. But I am confident that we will do so, and secure the future of our wedding venues. We must give hospitality and the wedding sector the support and certainty that it needs to restart and thrive.
Madam Deputy Speaker
Oh, I am sorry. We don’t go anywhere. Grahame Morris is here.
Grahame Morris
There is no need to apologise, Madam Deputy Speaker. Castle Eden Wood has come to the Commons. Thank you very much for calling me in this debate. I would also like to congratulate the hon. Member for North Devon (Selaine Saxby) and my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on promoting and securing the debate.
First, I want to reference my union. I urge the Minister to look at Unite the union’s fair hospitality charter and 10-point plan. The plan has been devised by people who work in the industry and it has a lot of merit.
I believe the Government should show some contrition in respect of the hospitality sector. Pre-covid, the hospitality and tourism sector employed about 3 million people, or about 8% of the UK workforce. Delays to the extension of the job retention scheme and uncertainty about that extension have led to redundancies and the termination of casual contracts. Lay-offs have resulted in the sharpest impact on jobs of any sector, with as many as 650,000 job losses this year.
Pubs and clubs very dear to my heart in my constituency spent many thousands of pounds at the beginning of the pandemic to be covid-compliant. I found myself agreeing with many Members, including the hon. Member for Poole (Sir Robert Syms). These establishments were inspected and monitored. They addressed any covid safety shortcomings immediately, because any that failed to comply were closed by the local authority. I want to place on record my thanks to those businesses, which could have traded and employed people, for doing all they could to cut covid transmissions.
In my view, those businesses have been let down by the Government. Three national lockdowns have crippled the hospitality industry. Economic output in the sector was down 90% in April 2020, compared to February the previous year. I support the proposed extension of the VAT reduction beyond September to allow the sector to recover. When businesses are fighting for survival, they need a Government who are going to support them.
I want to say a few words about the small brewing industry, which is under threat from Government policy. In my constituency, the Castle Eden brewery is not only suffering from lack of demand and a lack of grant support, its business has been put at risk by the Government’s proposed changes to small brewers relief. There is a simple solution: retain the relief at 5,000 hectolitres and stop the proposed cut to 2,100 hectolitres. It would be a scandal if small brewers survive covid only to be put out of business by ill-conceived reforms to the small brewers relief.
Paul Howell (Sedgefield) (Con)
I thank my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate.
The hospitality industry is the blood in the veins of our communities. It delivers so many things that make life worth living. It supplies the enjoyable days and occasions that, even before the pandemic, we all look back on fondly. Hospitality is not just about the special occasions; it is about the occasions we all treasure so much when they are taken away. It is the opportunity to have a coffee and a cake with an old friend. It is the opportunity to have a couple of pints while the world is put right. And yes, of course, it is about the weddings and the big birthdays. All have been stripped from us over the last year and it is imperative for the wellbeing of all that they are able to return as restrictions lift.
The hospitality industry has been impacted massively by the lack of celebrations, whether we are looking at a five-star hotel such as Rockliffe Hall, somewhere associated to a country park such as Hardwick Hall, or a pub with rooms such as the County in Aycliffe village. It is also pubs such as the Royal Telegraph, also in Aycliffe village, and small brewers such as Alan Hogg at the Surtees Arms in Ferryhill. It is about the food chains that enable them to operate and the multitude of staff who spend their working hours giving exceptional service.
The actions taken to frustrate the pandemic could not have been more focused on this industry if they tried. The Chancellor did his best to afford some respite to parts of the industry in the summer and his initiatives in the Budget have been helpful, but there is so much more of this industry’s core that is on life support and at risk of being terminated. Please can we consider urgently removing the ban on takeaway sales of alcohol from licensed premises in the lockdown? So many of our communities rely on the local pub for so much more than being somewhere to go for a pint. They are a critical part of the social infrastructure we need. They were already under threat before covid-19, but now the risk is critical. The all-party parliamentary group for “left behind” neighbourhoods, which I co-chair, has clearly seen how vital social infrastructure is for communities to thrive. It has therefore promoted the concept of an automatic assumption of “asset of community value” status for the last pub in the village, which would recognise the centrality of pubs and clubs to village life.
I would encourage another look at extending the 5% VAT rate to alcohol sales on licensed premises, as well as an extension in time. Also, the variable duty proposals led by my hon. Friend the Member for North West Durham (Mr Holden) have attracted 79 Conservative colleagues in a letter already. I also ask for consideration of sectoral support for the hospitality industry, with an extension of both furlough and business support grants beyond September, as many will have only just opened their doors in June.
I noticed today that Durham County Council has announced further support from discretionary funds for hospitality businesses and the associated supply chains. I welcome that, and hope that we can all grasp the opportunities available to support those businesses, while co-ordinating the efforts in supporting our high streets. Whether it is pubs, hotels, coach companies, brewers, wedding suppliers or the supply chains that sit behind them, their survival is critical to us feeling the benefit of lockdown lifting, and giving our communities back the precious times they have missed. We need to go above and beyond for them to give them the opportunity to give us our good times back.
Mary Kelly Foy (City of Durham) (Lab) [V]
The plan for a pint in our local or a meal in our favourite restaurant has been one of the simple ideas that has kept many of us going through the pandemic. These businesses are at the heart of many communities, acting as social hubs and boosting the local economy. Esh Winning needs the Stag’s Head; Brandon, the Brawn’s Den; and what Durham student experience is compete without a pre-lecture trip to Flat White? We cannot forget that when this cruel Government refused to feed our most vulnerable children during the school holidays, it was businesses such as the Drunken Duck in Durham that stepped up. In May, it was the Capital restaurant that delivered more than 100 free meals to our frontline NHS staff at University Hospital of North Durham.
That is why the Chancellor’s limited support for hospitality in the Budget was so disappointing. Yes, there were good elements to it, but the hospitality sector is facing incredible uncertainty, and the Budget fell well short of the recovery plan needed for the years ahead. Hospitality needs sector-specific support from Government that protects businesses and workers, such as an extended job retention scheme that ensures that no worker falls below the minimum wage, and is contingent upon greater rights for workers. That means guaranteed hours, utilising job sharing, and an end to fire-and-rehire tactics.
On top of that, over the last year businesses have taken on massive amounts of debt in order to stay afloat, and many now face a cashflow crisis. The Chancellor desperately needs to listen to Labour and introduce measures that will alleviate that pressure. Finally, the Government must recognise that 5,500 pubs and bars in the UK have closed since 2010. I urge the Government to help to address that by creating a hospitality commission that can identify the needs of the sector while helping to move it away from its reliance on low-paid, insecure work.
The hospitality sector provides many jobs to Durham, and attracts students to our university and tourists from across the world. I know that my respect for hospitality workers and businesses is shared by Members from all parties, so surely there is the collective will in this House to deliver a recovery strategy that secures the future of businesses while protecting the jobs and rights of workers. These businesses are the lifeblood of our communities. We simply have to ensure that they are still here not just come June, but next year and the year after that.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
It has been an incredibly tough year for hospitality. Many businesses have faced the biggest economic decline of all the sectors in the economy, and workers have faced problems with being furloughed, reduced hours and job losses. I give credit to Hull City Council for the support that it has given to more than 5,000 local businesses, despite missing out on the Government’s high street fund, which only goes to prove that if people want help and support, it is Labour they need to turn to.
The situation was tough before the pandemic, but it has got worse, although we have had some cultural renewal and some good news. For example, the development of Humber St, the award-winning Deep and the maritime history project are all bringing people into the city centre to spend their money, and I do hope that this desire to staycation will continue that. I am particularly delighted that we have been able to save the Polar Bear and the Welly, which are two fantastic live music venues in my constituency.
The move online has only been accelerated by the pandemic, and there are a number of actions I would really like the Government to take. It is simply not fair that five US tech firms have not paid more than £1.3 billion in lost corporation tax, while at the same time our high streets are still desperately waiting for the business rates revaluation that the Government promised such a long time ago. If we want to give businesses the chance to recover and get footfall back in the city centre and people spending money, we need to look at extending support past June, because they simply will not be immediately viable.
We need to address the cash crisis. The rates and the rent make up over 30% of hospitality’s expenses, and 53% of accommodation and food businesses have said that they have less than three months of cash reserves left, which is incredibly concerning. I hope that the Government will put aside party politics and look seriously at Labour’s plan for debt recovery, and support businesses having to pay back the coronavirus business interruption loans or the bounce back loans only when they actually start to make money and can afford to do so. Again, they should look at our plans for a high street recovery fund, and reuse the money the supermarkets have not needed, since they have made so much during the pandemic, and give it to the small businesses that need the support. Of course, I always think that more can be done to support our pubs, because we will all need a drink after this pandemic.
I would also like to ask the Minister to look at the pledges from Unite the union, but because of time, I will instead write to the Minister and outline those, but they include allowing workers to keep all their tips and action against sexual harassment at work. I want to conclude by saying to the Minister, quite simply: he needs to put money back in people’s pockets; if they do not have money, none of this counts because they will not be able to spend anything.
Jane Hunt (Loughborough) (Con)
I first congratulate my good friend, my hon. Friend the Member for North Devon (Selaine Saxby), on securing such a vital debate. I declare an interest in that my husband works for a logistics company and deals directly with the hospitality sector in his role.
Our hospitality industry is incredibly important to local communities both socially and economically. Some 3,000 people in Loughborough constituency alone are employed in the hospitality sector, offering everything from the ability to rent a table cloth for an event to arranging worldwide conferences for major businesses, as well as providing a scrumptious meal and a pint of local real ale by an open fire or indeed at a Michelin-starred restaurant, or a piece of cake and a coffee and a chance to meet friends in town. I would like to take this opportunity to thank every single hospitality business for all they have done over the past year to adapt to very difficult circumstances and particularly to protect jobs.
I would also like to thank the Government for the part they have played in this, having rolled out the financial support measures. In addition, I am pleased that the Government recently published their road map for reopening, which I know has provided much-needed certainty to many businesses and individuals in my constituency, as well as the emphasis the Prime Minister has placed on not reimposing restrictions once they have been lifted.
Working with Loughborough businesses over the last year, the most frequently asked question as we come out of these restrictions is, “Please can we come out with certainty?” I believe we are on our way to achieving this. What we all must realise is that we are the people who can make that succeed or fail. We must as a whole nation stick to the rules on social distancing, wearing masks and washing our hands, even when we are vaccinated, so that we can help control the virus.
For many months now, I have been advocating the use of testing to allow occasions such as weddings, rugby matches, conferences and other large events to restart. I would like to reiterate this point to the Minister, because the events industry overlaps considerably with hospitality services and provides a vital source of income for many hospitality businesses in my constituency. I would therefore welcome an update from my hon. Friend on the Government’s plans to achieve this.
There is a famous saying in the hospitality sector, which is that customers may forget what you have said but they will never forget how you made them feel. Well, hospitality sector—get ready! We have forgotten what you said a year ago, but I think everyone in this Chamber remembers how they felt the last time they were able to do the simplest thing, like meet a friend for lunch or go for a drink. The whole country is waiting for that great British hospitality to start up again: welcome back!
Alex Davies-Jones (Pontypridd) (Lab) [V]
It is clear from contributions from Members across the House that the hospitality industry across the country really is on its knees. In my own constituency of Pontypridd, we have some fantastic hospitality venues and businesses. There is not time to name them all, but I want to give a shout-out to a few, including Alfred’s and the Bunch of Grapes in Pontypridd, the Windsor in Pontyclun, the Rhondda Bowl in Tonyrefail, the brilliant and delicious Glamorgan Brewery in Llantrisant and, of course, our Savoy Theatre and the Muni Arts Centre. Those are just a few examples of the venues and business that have been hugely impacted over the last year and, sadly, a year on, we can all see for ourselves that our hotels, pubs, restaurants and entertainment venues across the country are struggling.
Only yesterday I had the privilege of visiting the Miskin Manor Hotel, a spectacular wedding venue in my constituency, to plant a tree as part of its memorial to the lives lost at the hands of coronavirus. The team at Miskin Manor have, like so many others, relied on the furlough scheme, and they have some fantastic plans to kick-start trade again when lockdown restrictions ease here in Wales, yet for so many others, the lack of future planning from this Government’s financial support packages has caused long-term damage that may be impossible for businesses to recover from.
The Chancellor has repeatedly taken a stop-start approach to economic support, which has ultimately failed the hospitality industry. These last-minute actions have harmed the high street and caused businesses and workers distress at their inability to plan for the future. It cannot and should not be this way. The sad reality is that it could have been different if the UK Government had simply made a more serious response to coronavirus early on, and while hindsight is of course a wonderful thing, I cannot help but be extremely frustrated at the sheer lack of planning. It is clear that the support schemes that were put in place for an expected three-month crisis are now no longer fit for purpose 12 to 18 months on.
The Government claim that they are committed to levelling up and that they want to boost the economy and protect jobs. Well, it is going to take a lot more than soundbites from the Prime Minister and the Chancellor to fix the situation in Pontypridd, let alone in the rest of the country. The reality is that they have utterly failed a generation, and I fear that our young people will sadly be paying the price of the Government’s mistakes for many years to come. There needs to be an acknowledgement that businesses in the hospitality sector, which clearly employ young people, have an extremely difficult few months ahead as the economy reopens.
In the Budget, the Government had the opportunity to bring forward a plan to help businesses through the crisis and beyond, including debt restructuring and a jobs guarantee for the young, yet once again we saw little in the way of long-term future planning. If the Government are serious about businesses, they must include a commitment to supporting our high streets too. In Wales, I am proud that the Welsh Labour Government have understood the importance of supporting businesses big and small, right from the beginning. It is vital that the UK Government understand that the devastation caused by the pandemic is not going anywhere, and that businesses in the hospitality sector will need ongoing support, likely for many years to come. I urge the Minister to take these cries for help seriously and to work with colleagues across Government Departments to ensure that forward planning for future generations is consistently covered in the Government’s ongoing response to the pandemic.
Virginia Crosbie (Ynys Môn) (Con)
I thank my hon. Friend the Member for North Devon (Selaine Saxby) for securing this important debate. Hospitality is the cornerstone of the economy in my constituency. Before 2020, the island hosted over 1 million overnight visitors each year and tourism brought in over £300 million in revenue. Almost a fifth of the island’s population are directly employed in the tourist industry and 12% of our VAT-registered businesses are in the hospitality trade. Of course, this does not take account of smaller businesses, or of the local supply chain that is dependent on those businesses. So when I say that covid-19 is having a significant impact on the economy of Ynys Môn, it is no exaggeration.
The first national lockdown in March last year came just at the start of our tourist season. Suddenly plans were thrown in the air, with bookings cancelled and refunds demanded. My inbox exploded with messages from deeply troubled small business owners. Many people on the island had sunk everything they had into businesses that now seem about to crumble into nothing. When the Chancellor brought out his first phase of support, it was a welcome beacon of hope for many. Of course, it was not a cure-all for everyone. It did not answer all the problems, but it gave hope that someone had a grip on what was needed to help. Through initiatives such as furlough, 100% business rates relief, small business grants and the VAT cut for hospitality, businesses such as Coffee Cups and Catch 22 were given the support that they so desperately needed.
When the summer came and those businesses could reopen, the Chancellor stepped in again, with eat out to help out. Ynys Môn saw 104 restaurants take part, with 74,000 meals claimed for, totalling nearly half a million pounds. Our hospitality businesses did us proud over the summer. Despite early concerns that tourism might lead to increased covid rates, our food and accommodation businesses complied with social distancing, personal protective equipment and sanitising measures, and our island’s figures stayed low.
We have been through a long winter, locked down by the Welsh Government’s firebreak over the half-term break in October, and again over the Christmas break. Many restaurants developed a new sideline in takeaway meals. I was delighted to run a competition last month to find our island’s favourite takeaway. I received hundreds of entries, with many people applauding the contribution that our restaurants and takeaways have made to our emotional wellbeing, if not always to our waistlines. The winner, the Pilot House Cafe in Penmon, is a great example of a business that has adapted to its circumstances over the past few months and made the most of what opportunity it could.
As vaccinations roll out, those businesses that have weathered the storm across the island, such as the Valley Hotel, the White Eagle, the Oyster Catcher and Dylan’s, are earnestly hoping that we can reopen soon, not only for our tourists but for our locals, who, like everyone else across the UK, are just desperate to enjoy a meal out and a drink with their friends.
Justin Madders (Ellesmere Port and Neston) (Lab)
The last year has been difficult for us all, with every aspect of our lives and livelihoods impacted by covid, but the hospitality sector has perhaps faced more challenges than most. Apart from a few months over the summer, many pubs and clubs have not been able to trade at all, and when they have been able to open, they have faced such onerous trading conditions that, if they have chosen to trade, they have often done so at a loss.
I understand, of course, why restrictions were needed on how people interacted in pubs, but the way we ended up, in the space of a few weeks last September, lurching from debates about whether Scotch eggs were substantial meals to whether 10 pm closures did more harm than good shows just how confused the response was, with rapid, almost weekly changes to how pubs were meant to operate. That constant chopping and changing only added to the financial burden that pubs face. What about the farce of Test and Trace check-ins for hospitality venues? They were used 100 million times but resulted in only 284 alerts. The Government should make sure that these things work properly if they are going to insist on them in the future.
When I look at some of the pubs in my locality that have not opened their doors for a year, I worry that they may never do so again. We know that in the last decade, a pub has closed once every 14 hours. My concern is that that shocking figure may end up being dwarfed once we see the true impact of covid on the sector. We must look at the sector as a whole—not just the bit we see as customers, but those in the supply chain. The brewers, the cleaners, those who supply the vending machines and the pool tables—all those businesses rely on a thriving hospitality sector to survive, and the importance of their making it beyond the next three months must be clear.
It is welcome that we now have a clear road map for the opening of venues, which is necessary to give sectors confidence. The last thing they need—the last thing we all need—is the stop-start, boom-and-bust approach that we saw last year, when where a business was based and what it provided dictated whether it could open at all, almost on a day-to-day basis.
Even when pubs reopen on 12 April, we need to recognise that that does not mean all pubs will be able to reopen. Those that do not have outdoor facilities will still be shut, and, frankly, we cannot be confident that the great British summer will come early enough to encourage people to drink outside in April. That gap has to be bridged. We must also remember that, when we hopefully get to full reopening in May, the road map requires table service only to be in operation. With social distancing, that means there will be, by definition, a limit on the number of customers a pub can have, and that limit is likely to be well below the capacity it used to enjoy. Again, that is a gap that has to be bridged, and many Members have already spoken today about how we can do that.
We all hope that this lockdown is the last, but I hope it has been made clear to the Minister today that, even if that is the case, there will still be challenges to the sector for many months to come. I will do my best personally to support the hospitality sector—within reasonable limits, of course—but I cannot do it on my own, and the sector cannot do it without Government support until the pandemic is completely over.
Tim Loughton (East Worthing and Shoreham) (Con)
There is no need to dream of going to Ayrshire, Madam Deputy Speaker; you know you are welcome to prop up the outside bars and pubs of Worthing and Shoreham at any time, as I know you like doing so much.
It is very difficult in three minutes to comment on what, as my hon. Friend the Member for North Devon (Selaine Saxby) said—I congratulate her on securing this debate—is such a big industry. It is a big industry, a very large revenue earner, a large taxpayer and a large employer. The fact that, in 2020, total revenues fell by some 54%, with potentially 600,000 jobs at stake, is very worrying. Undoubtedly, the many generous measures from the Chancellor have been a lifeline for many businesses and jobs, enabling them to survive the lockdown and hopefully to open up shortly. However, coastal communities such as mine are disproportionately reliant on the hospitality industry, and those businesses disproportionately employ young people, so there is a double whammy for already deprived coastal community areas and the young people in them.
Of course, this is not just about hospitality venues. There has been a significant impact on the suppliers and events service industries, as many hon. Members have said. I am talking about everything from the people making the pies and sausage rolls for football matches, who do not have a premises that they may have been able to get various grants for, to the wedding dressmakers—why on earth are we still limiting wedding receptions outside to 15 people, which is ridiculous?—to DJs, lighting suppliers and the kennels and catteries who do not have any customers because they are all stuck at home with their pets. It is vital that we do not delay any further. The industry needs certainty. The stop-start closures that many people have mentioned have been highly damaging. We have heard that 60% of pubs may not reopen on 12 April, and it is really frustrating that pubs cannot not be open, even outside, even with all the social-distancing measures that they have put in place, for the Easter bank holiday weekend.
Hotels have been particularly hard hit. Many of them cannot comply as easily with the regulation as self-catering and Airbnb accommodation. Many restaurants and pubs have not been able to benefit from carrying on their takeaway trade, and historic venues have ongoing maintenance costs for which they need to raise money. Although we will benefit from domestic tourism this year because of travel restraints, we are not going to benefit properly from unvaccinated Europeans coming in, which is a very lucrative part of the tourism industry.
We need to extend some of the generous measures. We need the 5% VAT rate to become permanent. The 20% rate does not sit easily with continental hospitality industries. We need to look again at the rate multiplier on business rates—the Chancellor needs to look at adjusting it downwards. Home drinking has brought in an £800 million windfall. The Chancellor has the leeway and capacity to be even more generous to the hospitality industry through this really important period. I hope he is listening—cheers to that, Madam Deputy Speaker.
Alison Thewliss (Glasgow Central) (SNP) [V]
I agree with what many speakers have said about hospitality. While this is a debate about hospitality, I see it very much in my constituency as a very interconnected ecosystem, because without live events and shopping in the city centre, people are not going to come in to spend money in the hospitality sector. There is no pre-theatre meal if people are not going to the theatre, and there will not be the drinks afterwards and the taxi home. Without people coming in for weddings, for example, there are fewer hotel stays and, without the huge conferences and events that Glasgow hosts, the hotel sector is struggling massively.
The wedding sector is huge, particularly in the Asian community in Glasgow. If people have not had the pleasure of attending an Asian wedding in Glasgow, perhaps they have watched the show, “Getting Hitched Asian Style”, on BBC Scotland, and I would certainly recommend it. These are incredibly glamorous and expensive events to put on, and I really feel for Saffron Events and others like it that have tried to diversify in lockdown but which are not able to put on the tremendously elaborate weddings that they usually would. I very much hope that they will be back doing what they love very soon.
It has been incredibly difficult for many of the venues in the city centre that rely on the passing trade of the SSE Hydro. All the restaurants in Finnieston had been booming since the Hydro came to town, and without that, it is much more of a struggle, even when the sector does diversify. Without venues operating such as the Barrowlands, King Tut’s, the King’s theatre, the Pavilion theatre, and all the other theatres and venues within the city centre, the other things that we enjoy very much in our city become much more difficult to sustain.
I urge the Government very much to take on board the errors that they made over the past year. They locked down too late and unlocked too early. The furlough dithering towards the autumn last year cost jobs in the sector—jobs that young people relied on and now cannot get. I ask the Government to look very carefully at extending the 5% VAT reduction for the rest of the year at the very least, as people have not benefited from that, because nobody has been able to go out to restaurants, or to spend money at events, which also had the 5% cut, or on their hair, beauty and at salons, which would also like to see that 5% cut extended to their sector, which again brings many people into Glasgow city centre. We are looking at a sector that has become heavily indebted and dependent on the furlough scheme, and when that goes, the Government will have to think carefully about how it is supported for the rest of the year. It has been the most difficult year for a sector that demands so much of our public joy. I feel very sorry for everybody within that sector, but it is an ecosystem and the Government need to consider it as such. No business stands alone.
Neil Parish (Tiverton and Honiton) (Con) [V]
It is a pleasure to speak in this debate, and I congratulate my hon. Friend, and neighbour, the Member for North Devon (Selaine Saxby), on securing it. She is right to point out the importance of the hospitality industry to our economy in the west country. Before the pandemic, the hospitality and tourism sector was worth more than £2.5 billion to our local economy each year. That supported more than 3,000 businesses in Devon, and created more than £200 million of spending in the industry’s supply chains. Many of our hospitality businesses have suffered over the past year, and I am grateful for the support that the Government, both local and national, have provided.
As Chair of the Environment, Food and Rural Affairs Committee, I have a particularly strong interest in our food industry. During the first lockdown, we launched an inquiry into covid-19 and the food supply, as pubs, bars and restaurants shut down, and the companies and workers who supplied them found their revenue sources removed overnight. Farmers and food suppliers tried to move food originally destined for hospitality to supermarkets, but the adjustment was difficult. British dairy farmers, for example, lost more than £41 million. The Government stepped in to help the dairy sector with a hardship fund, but many other sectors supplying hospitality businesses have continued to struggle.
It is clear from our inquiries over the last year that it is not only cafés and pubs that need extra support, but also the small and medium-sized food-and-drink businesses that supply them. The Government’s support for hospitality will be only partially successful if supply chains collapse, and the same is true of the wedding industry. Large venues such as Deer Park country house in my constituency have received a good amount of support from retail, leisure and hospitality grants, as well as the new restart grants. However, it has been more difficult to target support for the florists, cakemakers, dressmakers, photographers, caterers, and musicians, who rely on the weddings and events industries for their businesses. The Government have generally gone for a “catch-all” approach, which I understand, instead of sector-specific support, but that has left some hard cases and a lot of confusion for some sectors.
There is a lot of financial support out there, and we must ensure that our constituents know about the support schemes and how to access them. That is why this debate is especially useful, as we tackle the final weeks of lockdown and look to reopen the economy. I hope that the Minister will continue to engage regularly with representatives from the hospitality sector, to ensure that businesses are aware of what specific support is available to them now and as they look to reopen. I believe that the combination of tax cuts, cash grants, and the relaxation of planning laws over the next 12 months can help the many tourism and hospitality businesses in Tiverton and Honiton to survive and thrive, and I thank the Minister for her continued support.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The hospitality industry is of enormous importance to the Northern Isles, and an integral part of our well- developed visitor economy. Hospitality, I like to think, is something that comes very naturally to us in Orkney and Shetland. Indeed, we were described by one visitor to me a couple of years ago as being “dangerously hospitable”—I know exactly what he meant.
It is worth reflecting that this time last year, those in the visitor economy and hospitality industry were saying that local businesses feared that this situation would last for three winters. We would come out of six quiet months, and instead of the six good months that would normally be expected, businesses would be quiet, then there would again be the six quiet months of the winter. That is where we now are, except that this time last year, we believed, and indeed hoped, that we would be coming out of this. It is now clear that we are in fact some distance from being out of it. It is clear from the limited opening that we had in summer last year, that when it arrives, recovery will not come at a uniform pace. For self-catering businesses in Orkney and Shetland, business returned easily, but for the bed and breakfasts and hotels, it was a much more difficult path back to recovery.
It is also the case that in communities such as mine—I am sure this is true of rural communities across the whole country—the hospitality industry and the visitor economy are integrated with just about every other sector in our local economies. The craft industries, such as knitwear and jewellery manufacturers, depend on it. We have also seen the depression of hospitality across the whole of the United Kingdom; in Orkney and Shetland, that means that the premium producers of beef and lamb and the fish and shellfish producers are also suffering, because the restaurants are not open to take their products.
It feels like we have all had a year on a life support machine, as far as the visitor economy is concerned. Even as we emerge from that, it is still going to be necessary for some of the intensive care to continue. For the Government, that means that we cannot have immediate withdrawal of things like the furlough scheme: they will have to look at a tapering-off of that support, and it will have to be looked at sector by sector, and possibly even region by region. As others have said, the reduction of value-added tax for the hospitality industry has been of massive importance, and indeed there is a strong case, which many of us have made over many years, for it to become permanent. I do hope that that is something that the Treasury will now consider.
Greg Smith (Buckingham) (Con)
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing this debate. I associate myself with the remarks made a few moments ago by my hon. Friends the Members for Tiverton and Honiton (Neil Parish) and for East Worthing and Shoreham (Tim Loughton) regarding the wedding sector and the wider events sector, but I want to focus my three minutes on pubs and small breweries, particularly in rural communities. A recent survey by the Countryside Alliance revealed the harsh reality that our pub trade faces. Only 34% of publicans who replied to that survey said they can hold out if they are shut until the summer, and we know from British Beer and Pub Association research that 60% of all pubs in the UK will remain closed after 12 April, even under the current road map. Losing pubs would be devastating and irreversible.
I welcome the Chancellor’s continued support in the form of additional grants, the extension to the job retention scheme, the 5% VAT rate, and the business rates holiday. However, there are some gaps that need to be addressed. I am backing the Countryside Alliance’s #UnlockInn campaign, particularly calling for all pubs to be permitted to serve takeaway alcohol right away. The current situation is perverse, given that supermarkets can continue to sell alcohol. Likewise, indoors trade should be permitted from 12 April. Ever since my election, I have been delighted to support the Long Live the Local campaign, calling for a beer tax cut to support our local pubs. I hope the ongoing alcohol duty review will conclude that a cut to beer duty will support our brewers and pubs and level the playing field. Likewise, the proposal from the Campaign for Real Ale for a draught-beer duty cut would further help level that playing field: modelling shows that just a 5% duty cut for draught beer could create 1,000 jobs in the on-trade.
Coupled with that is the need to reverse the proposed changes to small breweries relief. Some 2 million fewer pints of craft beer were brewed by small breweries last year, and two small breweries a week closed their doors for good last summer. There are four fantastic independent breweries in my constituency: Chiltern, XT, Vale and Blackpit. These businesses are set to be hard pressed by the proposed changes. A small brewery may have to pay up to £44,000 extra tax per year, putting jobs and their recovery at risk, and those changes will be introduced next January, giving businesses hit by covid little time to prepare. What is the point in helping the hospitality trade if there are not vibrant, diverse and local beers on offer when the economy reopens? Finally, it is absolutely crucial that the dates in the road map are kept to, or brought forward. That way, we can give our hospitality sector the best chance of recovery, and get the pints pouring once more.
Wendy Chamberlain (North East Fife) (LD)
For about half of the past 12 months, the brilliant hospitality industry in North East Fife has been forced to close its doors. Obviously that has had a profound impact, from the Ship Inn in Elie, to Kingsbarns Distillery, to our many fantastic and historic golf clubs, to wedding venues such as Kinkell Byre, to street food like the Cheesy Toast Shack in St Andrews. There has been support, for which I am grateful, but I have spent much of the past year arguing for the people and businesses who either missed out on support or for whom the support received has been inadequate. My casework team have done a brilliant job in navigating through the often complex support schemes of both the UK and Scottish Governments.
All being well, this will be the last time that I speak on hospitality before the businesses in North East Fife can open their doors again on 26 April. I, for one, cannot wait to finish our door-knocking sessions with an ice cream from Jannetta’s in St Andrews. But it will not all be plain sailing from that point. Social distancing requirements, limits on households and table service will be a reality for all these businesses. Even though in Scotland indoor hospitality is opening on the same day as outdoor, no alcohol can be sold indoors initially, so there is a disadvantage for premises that do not have outdoor seating.
The obstacles go further. Mainland Scotland moves back into level 3, but that will mean travel restrictions preventing anyone from entering or leaving a local authority area. When Fife was in level 3 last year, that presented a real difficulty for many hospitality businesses in the area. Indeed, I have previously spoken in this place about the Peat Inn, which is a Michelin-starred restaurant that attracts most of its business from outwith Fife—tourists who come to stay in bed-and-breakfasts and hotels. Under level 3, it was legally able to open, but business was so limited that it was forced to shut its doors again. The Scottish Government’s approach thus far has been that businesses that can legally open are not eligible for the grant support available to level 4 areas, and that has not changed in intervening months since last autumn as we now enter the spring. It was a real difficulty then and it is still a real difficulty now.
It is hard to justify that lack of support: first, because they are Government restrictions that are hampering business by preventing travel into the kingdom of Fife—as many others have said, the likelihood of seeing overseas visitors this year is fast diminishing—and secondly, because both the UK and Scottish taxpayers have now provided so much support to businesses around the country through the furlough scheme, rates relief, and the small grants administered by local authorities. The whole point of that support has been to get those businesses through what has been, in effect, three winter seasons in a row, as my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) said. Now, thanks to the public’s hard work in following lockdown restrictions, we are in a position where we can begin to recover, so let us not take the support away too early, or all the efforts over the last year will have been wasted. Now is the time to enable our businesses not just to survive but to thrive. Let us put recovery first.
Charlotte Nichols (Warrington North) (Lab)
I have now spoken in a number of debates as chair of the all-party parliamentary group on pubs to highlight the existential threat to the trade from the events of the past year and to ask for clearer support for the sector. It is a shame that here I am again, repeating calls that have so far gone unanswered. For those of us who do not want to hear the last orders’ bell tolling for pubs in every single one of our constituencies, the Government must recognise what more needs to be done to sustain them until custom can properly return.
I welcomed the grants made available, including in the Budget, but many in the sector have been saying that they are insufficient. The British Institute of Innkeeping stated that
“these grants will not even cover the furlough contributions that will be needed to safeguard their teams until May, let alone June.”
The business rates holiday and VAT cut extension were also welcome, but do not make up for the losses that have accrued and will continue to accrue until pubs are able to open fully. Wet-led pubs, in particular, will continue to suffer. I am glad that they no longer need to comply with the farce of the Scotch egg test—may I say that its removal shows that it was a hollow necessity all along?—but they will not benefit from the VAT cut, which is restricted to food, soft drinks and accommodation. These problems are made even worse for pubs without beer gardens or outside space, which will still be on severely restricted capacity until at least 21 June.
Alongside our pubs, the brewers that supply them need support too. About 80% of the beer made by small producers, including the Coach House Brewing Company and Twisted Wheel Brew Company in Warrington North, and the 4Ts Brewery just over the Mersey from us, is sold in pubs. The devastating loss of trade, with pubs closed, 200 million fewer pints of craft beer brewed in comparison with 2019, and 6 million pints of beer poured down the drain this year, represents 10 years of lost growth for the sector. They desperately need compensation and support to recover.
Pubs and their suppliers deserve the support they need until they can reopen properly—a day to which we are all looking forward very much. I know that I am not alone in longing for the days of a pint or five in my local with friends and making new friends in the smoking area. As our freedom to enjoy those days comes back, we need to ensure that the sector is there in which to be able to enjoy that freedom.
Stephen Flynn (Aberdeen South) (SNP)
I commend the hon. Member for North Devon (Selaine Saxby) on securing this important and topical debate. As my hon. Friend the Member for Glasgow Central (Alison Thewliss) said, a vibrant city centre is very much the sum of its parts: its retail, its leisure and its hospitality. On that point, I would like briefly to reflect on the terrible news from Aberdeen today that our local John Lewis store is to close. Some 265 good jobs are currently up in the air, and my heart goes out to each and every individual who is potentially impacted. I know that, across the political divide in Aberdeen, we will all unite to try to convince the organisation to take a different path—one that retains such a vital department store in the city of Aberdeen. It is probably apt to reflect on the importance of such a story in the wider context of a city centre, because we all know that when we go to city centres to enjoy what is on offer, it is not just for the pubs, the food, the cinemas or the parks; it is also for the shops. As I say, it is a collective, and we all need to be very mindful of that.
As we have heard from numerous Members, the last year has been an extremely challenging time for those in the hospitality sector. They have had to face myriad changing circumstances, be that in relation to social distancing, opening times or what they can and cannot serve. I have a great deal of sympathy for them in that regard. They have had to put up with an incredibly difficult set of circumstances, and I know that they have diligently tried to adhere to everything that has been put in front of them. I sincerely hope that in the not- too-distant future, we can all get back to enjoying ourselves in establishments across Scotland and the UK.
For my own part, I cannot wait to get back into BrewDog and down to the Cove Bay Hotel for some food or, indeed, to North East Fife, because I have a couple of vouchers for some places in St Andrews that I am desperate to use. I was given them at Christmas in the expectation that I would be there before now. It was nice to hear the remarks from the hon. Member for North East Fife (Wendy Chamberlain) about what her constituency has to offer; it is a wonderful part of the world.
We are all keen to get back out there and enjoy ourselves, because having that social contact with people in environments that we all love and enjoy is the very essence of our being. That is to come, but in the meantime, we need to reflect on the challenges that will still be there for the hospitality sector. When things open up, it will not simply be a case of “back to normal”. First, those in the sector will have to deal with the fact that restrictions are still in place, but they will also have to deal with the fact that consumer confidence is shattered. People are going to be a little bit anxious about doing what they previously did. It is incumbent on the UK Government to take cognisance of that fact, in particular in relation to VAT. The 5% cap for the hospitality sector has been a good move, but we need to see that extended until the end of the year, at least to allow businesses the certainty that they need.
That certainty is important. It was important last autumn, when businesses in Scotland tried to close due to public health reasons, and we asked the UK Government repeatedly to extend the furlough scheme. They delayed and delayed, and only at the last minute they decided to extend it on the basis of the situation in south-east England. We cannot allow that to happen again. Scotland does not have the powers that it should have in that regard. It is of much frustration to me, as I am sure the Minister will be aware, that we cannot borrow to try to fill the gap caused by the shortfalls in the UK Government’s schemes.
Of course, where we can take action, we have taken action. Scotland’s Finance Secretary delivered our Budget recently, and we went further than the UK Government on rates relief. I have heard today the frustration of several Members about business rates and the fact that in England there will be a taper of the support over the year. That is not the case in Scotland, where there will be 100% rates relief throughout the coming financial year. We are trying to provide the certainty that we can to hospitality businesses; it is time for the UK Government to step up and do likewise.
I am conscious of the time, so I will finish where I started, with some local narrative. Towards the end of last year, there was a lot of difficultly in the hospitality situation in Aberdeen and some challenges with adherence to social distancing and the like, but the hospitality sector in our city got together and created Aberdeen Hospitality Together. That re-instilled the confidence that we all needed. Dutifully led by Stuart McPhee from Siberia Bar & Hotel, people across a whole host of venues managed to put in place a format that people could believe in and trust. As we move out of lockdown in the coming weeks and months, that trust is going to be so vital. I look forward, as indeed does everyone else in the Chamber, to getting back into a pub and drinking far too many beers.
Lucy Powell (Manchester Central) (Lab/Co-op)
I thank my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) and the hon. Member for North Devon (Selaine Saxby) for securing this debate.
In the interests of fairness, I wish to put on record the very vibrant, trendy fashionable nature of Manchester city centre, with its wide hospitality, cultural and night-time economy. I think I have in my constituency the most pubs and bars out of any Member in this House. I say that just in the interests of fairness, of course. I also put on record my admiration for and pride in our hospitality sector and supply chain and the difficult role that it has played in keeping us all safe this year.
The Government have a moral duty, as well as an economic imperative, to ensure that as many shuttered businesses as possible are able to reopen viably. We supported lockdown and the “whatever it takes” mantra, but we have seen economic support increasingly diverge from public health measures. This is wrong. There is also a huge economic cost in seeing successful businesses going to the wall through no fault of their own, with lost taxes, scarring unemployment and lower growth. In the end, we all pay more for not supporting businesses than we do for doing so.
The initial package of schemes—furlough, grants, loans, deferrals and so on—was welcome, but as time has gone on it has become increasingly clear that those schemes were okay for three months but not designed for the 12 to 18 months of lockdowns and lost trade that we have seen. The gaps at the start have become ever larger, and the debts, overheads and deferrals have mounted, leaving the sectors that are most in distress, such as hospitality, on the brink, facing huge uncertainty on rocky foundations.
It is clear from the Office for Budget Responsibility figures published with the Budget that there is a lack of ambition about the longer-term recovery, with low growth now seemingly accepted by the Government. The Chancellor is betting the farm on consumer spending doing all the heavy lifting. He is taking a big gamble that saving spending alone will drive the recovery. There are only so many haircuts and meals out that people can have in a short space of time, and for many, cuts to family budgets will take money out of local economies anyway. It is as if the Government cannot wait to get off the pitch. Having done the bare minimum to provide a safety net, the aftermath is not of their concern. This is the wrong choice for our economy.
The announcements in the Budget do not mean that the job is done. We saw that in the reaction to the Chancellor’s photo opportunity with a certain celebrity chef, which became his very own kitchen nightmare. There is still huge uncertainty. There is still a looming bombshell facing firms. There are still many hospitality businesses on the brink of going bust, and big gaps in the support for those in the supply chain and those who have been excluded from the start are getting bigger.
Let us take the gaps in support. Businesses could have just about survived them for three months, but are totally desperate after a year and counting. The wedding sector; the events industry; the night-time economy, including taxi drivers and security staff; supply-chain businesses; freelancers; and company directors, including festival organisers and small traders—all have been abandoned. The additional restrictions grant has been too little, too late, caught up in red tape with complicated guidance creating a postcode lottery.
Debt is another issue that is pushing businesses to the edge and threatening the recovery. Companies have taken the loans, deferrals and moratoriums, but as trade slowly restarts and the debts are called in, businesses will go bust. This is an issue for the larger chains as well.
There are also many measures that Ministers have got wrong, making a bad situation worse. Business interruption insurance claims have been the bane of many businesses’ lives, with insurers failing to pay out—if a pandemic is not “business interruption”, what is? The news today that the Government are not prepared to help with insuring large events and festivals is a hammer blow to this summer’s recovery. The Chancellor’s job retention bonus, which businesses were relying on, has now been dumped. With the curfew, the substantial meal rule, and businesses open one day and closed the next, poor decisions have exacerbated the economic woes of the sector. Ministers should learn from these mistakes, but it is clear that they have not. Just yesterday, I was contacted by William Lees-Jones, a Manchester brewer, who rightly complained that there will only be a week’s notice before pubs’ outdoor opening is confirmed, with this being announced on a bank holiday. Hospitality businesses just think the Government do not get their sector.
Although the road map is welcome, it is not a road map for all, and for most is still way too uncertain to plan around: to buy stock, brew beer, bring back staff or book a wedding. The visitor economy is a big part of the hospitality ecosystem—tourism, conferences, events, sports, culture and weddings; for them, the road map still leads to a brick wall. The hospitality industry is vital to the recovery. It drove growth after the global financial crisis and, with the right help, it could do so again. As things stand, the industry will not be able to be the work-horse of job opportunities that it once was, especially for the young. We need a real plan to support hospitality to thrive, with the overhaul of business rates that is long overdue; real action on debts, with loans paid back on an income-contingent basis, as Labour proposes; a proper job support scheme to reduce unemployment and drive growth; powers and resources to reignite our towns, city centres and high streets through a hospitality and high street fightback fund; an extension of al fresco dining measures; more sector support, especially for the wet-led pubs; the freeing up of group businesses and chains from state aid rules when it comes to cash grants; and public health guidance which makes operating viable and is fair to all parts.
Hospitality businesses were the first to feel this crisis and will likely be the last out of it. Firms have seen four winters in a year, and no golden quarter. Every previously viable business that goes bust will lengthen and deepen the long tail of recovery. That is not just the Labour view, but the view of the International Monetary Fund, the Bank of England and the OECD. We have to support businesses today, tomorrow and through the recovery. The truth of the Budget was a Chancellor failing to do enough to stop insolvencies and to support long-term growth—that was the verdict of the OBR. Now, “whatever it takes” must mean just that, otherwise we will see a repeat of the mistakes of the last decade of low growth and stagnant living standards. We cannot afford to go back to business as usual.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing today’s debate. She has given me another stopping place in her constituency for us to have a drink in when we are eventually able to do so, the Bell Inn in Chittlehampton, and we will have to go to the Nartnapa Thai kitchen in Lynton to have a good meal there as well. This debate is important because the hospitality sector is so important. As we have heard, it is important for its contribution to the economy, for local high streets and communities, for the millions of local jobs that it creates, and for the health and wellbeing of us all. This debate has highlighted just how important the sector is, and I hope it will go some way to restoring public confidence and kickstarting the recovery as we see the road map to recovery.
We have heard of those local examples, including my hon. Friend the Member for Burton (Kate Griffiths) talking about Carling’s “support your local” campaign. We have heard about restaurants such as Bartellas, and about cafés such as Coffee Cups, Catch 22 and the Pilot House in Ynys Môn. We heard about Mulligans Sports Bar supporting its local area in Scunthorpe. We know that nationally the hospitality sector is a big deal, employing about 1.3 million people across 162,000 businesses, but arguably it is even more important at the local level, providing that cornerstone of our high streets, securing local jobs and opportunities for local suppliers, supporting the events that attract visitors to towns and cities up and down the country, and providing space for family and friends to come together. In short, hospitality is the lifeblood of our communities, our society and our heritage.
Since the start of the pandemic, I have worked closely with the sector to understand the issues involved so that I can best represent its interests in Government. That engagement has helped to shape the business support package and ensured that as many hospitality businesses as possible had access to some form of support. Clearly, it would not have been possible to have a separate scheme for every sector and every industry, or to compensate every company for every pound lost as a result of the pandemic. The Government support package is designed to ensure that as many businesses as possible—from the large chains to the sole traders—qualify for some level of business support, with the aim of saving as many otherwise healthy businesses and jobs as possible.
That package included job retention measures, support for the self-employed, access to grants and loans, VAT cuts, business rates relief and the moratorium on commercial rent evictions. In addition, we have provided local authorities with £2 billion of funding to support those businesses that do not qualify for the local restriction support grants and the restart grants, including breweries; freelance and mobile businesses, which take in caterers, events, hair and beauty, and wedding-related businesses; tourism businesses, including group travel and tour operators, B&Bs, and events industry suppliers. I urge local authorities to use the discretionary additional restrictions grant funding generously to support those businesses and others that have not had other forms of support. After all, they could, as we have heard, play a critical role in attracting visitors to the city and town centres, as well as to their local areas, over the summer and beyond.
Equally, local authorities should have the guidance for restart grants to help them plan ahead and get the grants out quickly, so that businesses are in the best place to reopen at step 2 of the road map. None the less, no business support package can ever match the benefits of operating in an open marketplace. While the new restart grants and the additional restrictions grants are important to the reopening and recovery of hospitality businesses, local authorities also have a part to play in helping businesses to reopen safely, by making it easy for them to maximise outside seating, tables and street stores to serve food and drinks. That will not just help hospitality businesses to reopen in a way that provides extra capacity and therefore revenue, helping them to manage down accrued debts, but provide the sector with longer-term resilience.
I encourage local authorities to make use of the welcome back fund announced on Saturday 20 March and the additional restrictions grant funding to run publicity campaigns and to prepare for events such as street markets, festivals and all those sorts of things to help support local businesses. Campaigns and safe events will be vital in encouraging the return of shoppers to our town and city centres. At the same time, we need to make sure that we embed confidence by supporting local pubs, cafés and restaurants.
The hon. Member for Manchester Central (Lucy Powell) raised the issue of those that had missed out on support, which I have already addressed, but a number of Members mentioned small brewers and the relief fund. The Chancellor has launched a technical consultation, which closes on 4 April, and I encourage all brewers and people interested in that sector to make sure that they have their say. Beer duty has been frozen for the second year in a row, saving drinkers £7.3 billion. The Government will set out details of the next stages of the review in due course.
We also heard from the hon. Member for North Antrim (Ian Paisley). I have been working with Colin Neill from Hospitality Ulster on the hospitality sector in Northern Ireland, and I am grateful for his feedback. I say to the hon. Gentleman that it is about time that we renewed the karaoke session that we had a few years ago in his constituency.
Finally, a number of Members, including my hon. Friends the Members for Loughborough (Jane Hunt), for Cheadle (Mary Robinson) and for Tiverton and Honiton (Neil Parish), raised the issue of weddings. I value the fact that I was able to work with the weddings taskforce, which was brought together by the sector itself, involving a disparate number of businesses and voices focused on producing concentrated and collaborative work. We do need to do more to make sure that we can give them the certainty that they need as we get to step 2, and I will redouble my efforts to make sure that we can get that done.
In conclusion, the road map that the Prime Minister announced provides a gradual and cautious step-by-step—not stop-and-start—plan to reopen the economy. That, in tandem with the progress of the vaccination programme—bear in mind that at some points on Saturday, we were achieving something like 27 jabs a second—means that we are hopeful of keeping to our schedule.
Despite the progress over the last few months, we cannot pretend that the way forward is easy or that difficult choices do not lie ahead. For the sake of people across the country and for the NHS, we must remain cautious. We must remember hands, face and space. Ventilation and fresh air will also be hugely important as we seek to reopen. That is why the road map starts with outdoor opening before we come indoors. The events research programme, which is looking at how we can have covid-secure events including larger weddings, will report back in May.
We remain cautiously optimistic. I look forward to returning to the hospitality sector, as I think we all do in this House.
Selaine Saxby
This is obviously the time of the evening when we should all be going to the pub or to our much-loved bars here in the House, where I probably owe colleagues who did not get to speak today a pint. I know they would have spoken with passion in support of their hospitality businesses and whetted appetites with their tantalising take-outs.
I thank the Minister for his response. He knows that a cold beer is on the bar whenever he wants to visit North Devon; I hope that the duty on it will reflect the calls made across the Chamber today. As the self-appointed one-woman tourist board for North Devon, I invite all Members to visit when the time is right. I hope that they will then understand why I am quite so passionate about ensuring support for the sector here, across the country and particularly in North Devon. I thank everyone for taking part today.
Madam Deputy Speaker (Dame Eleanor Laing)
The Question is as on the Order Paper. As many as are of that opinion say “Aye.” [Hon. Members: “Aye.”] I was looking for a more enthusiastic “Aye!” about pubs opening. Shall we do it again? As many as are of that opinion say “Aye!” [Hon. Members: “Aye!”] To the contrary “No”—the Ayes have it.
Question put and agreed to.
Resolved,
That this House has considered support for the hospitality industry throughout the covid-19 pandemic.