Social Distancing Restrictions: Support for the Night-Time Economy

Tuesday 8th June 2021 Westminster Hall

[Stewart Hosie in the Chair]

11:00

[Stewart Hosie (in the Chair)]

I remind Members that we have made some changes to normal practice in order to support the new hybrid arrangements. Members attending physically should clean their spaces before they use them and as they leave the room. Mr Speaker has stated that masks should be worn in Westminster Hall, except when you are speaking.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I beg to move,

That this House has considered social distancing restrictions and support for the night-time economy.

I asked for today’s debate because I am vice-chair of the all-party parliamentary group for the night time economy. As the Member for Brighton, Kemptown, I also represent a large and diverse number of venues, bars and clubs. Not only am I the MP but, like many Members, I am a patron of many of the venues in my constituency, such as Revenge and Legends, and I miss my nights out with my friends as much as I know the venues miss having us. When I talk to bar and club owners, they tell me the same thing: the uncertainty is killing them.

On 16 December, when covid cases were spiralling out of control, the Prime Minister insisted it would be “inhuman” to cancel Christmas, and he gave every assurance that it would go ahead. Pubs and restaurants had their staff hired, and the stockrooms were full and ready for a shortened Christmas season. On 19 December, just three days later, and after saying it would be inhuman, the Prime Minister cancelled Christmas. I do not say that he made the wrong call in locking us down. History will show that he was right to do so or, if not, that he should have done it earlier.

I raise what happened in December because I worry that we are repeating ourselves. The Prime Minister bumbles away through his interviews, assuring the nation that everything will be just fine with the road map on 21 June. Meanwhile, we have Whitehall officials briefing today’s papers that the date will be pushed back. What is it? My fear is that the harsh reality will catch up with the Prime Minister yet again and he will have to acknowledge what we already know: the 21 June deadline might have to be pushed back a few weeks to get everyone vaccinated. Those who will suffer are the workers and businesses who have trusted in good faith that they should work towards that date, although—granted—no cast-iron guarantee has ever been given.

The Night Time Industries Association conducted a survey of its members. Nine in 10 businesses fear that a delay in the full reopening of nightlife would threaten their survival; 85% require at least two weeks’ notice to open up, and over a third said they need four; 95% have already made financial commitments; on the logistics of opening up on the 21st, 54% have already ordered stock—as a real ale man, I know that that stock goes off incredibly quickly, so it has to be used in time; 73% of businesses have called in staff; 60% have sold tickets; 64% have booked entertainment; and 80% have already spent finances on marketing and promotional materials.

Louise from the Camel Club, a family nightclub in Huddersfield, told our APPG that she does not know under what conditions the nightclub will be able to open. She does not even have a rough idea of the direction that it will be going in. For example, when it opens, is social distancing likely to be required? What other rough ideas will be given? This has made it extremely difficult to even prepare. She is plucking things out of thin air rather than at least following guidelines that could change. That makes things difficult operationally and financially, so what guidelines can be issued so that clubs can at least work towards a general direction? Will they be able to open on the 21st? If not, can there be reassurances that financial support will be offered?

The pandemic has presented a real jobs crisis too. According to Unite, 48% of hospitality workers say that they will look for work in a different sector post pandemic. The industry is heading towards a skills employment crisis. The problem is that the so-called barista’s visa—the roll-out of potentially low-paid, exploitative apprenticeships on a visa—is not the way forward. There have been 650,000 job losses across this sector alone.

This is not just a problem for those in hospitality. There is a knock-on effect—for example, in the security business. The UK Door Security Association warns that six out of 10 supervisor posts are now unfilled in nightclubs, music venues, pubs, bars and festivals. The posts being unfilled risks the venues being unopened. That was one of the reasons we had to cancel Pride in Brighton: we just could not secure the security staff, as well as not having the underwritten insurance, because the Government did not underwrite that either.

So many door staff have been forced to find other forms of income. They have opted to use their security licences in more stable environments, such as retail or covid testing centres. There is an increase in resource demand, as venues have to adhere to covid requirements. If they are able to go ahead, many festivals will now be squeezed into a tight summer season. We also see increased demand in certain pinch points.

The Government must work with the associations, and with organisations such as Unite and other unions, in their proposed hospitality commission, to establish a plan for the sector, to retrain workers who lose their jobs and to ensure that those people do not face long-term unemployment. In my view, the kickstart scheme is not fit for purpose on hospitality. It has offered only 60 of the 1,260 placements to hospitality workers. Hospitality training programmes should be focused on upskilling the industry and creating new, quality jobs with guaranteed hours.

Business owners in the night-time economy now have debts equal to three years of trading profit. That is £2.5 billion just in debts that they did not have before the pandemic and that they will have on opening day. They are also having to potentially invest in social distancing measures that they do not know will even be implemented. That is why the Government need to give more guidelines on what might happen.

The moratorium on forfeiture is to be lifted at the end of this month, and no solution has been offered to address the legacy of rental debt wrought by the pandemic. Some 75% of night-time businesses say they fear bankruptcy or insolvency when the moratorium ends, if there is no solution to commercial debts. Some 80% of commercial tenants in the sector still face unproductive discussions with landlords. The situation requires the Government not just to issue guidelines or suggestions to landlords, but to require landlords to get around the table and negotiate with businesses. The Government should come forward with a package to ensure that businesses take no more than a third of the burden—effectively, one year’s operating profits—and that the rest is shared with landlords, other suppliers and maybe even the Government in long-term solutions that would mean these businesses do not go bust, which many are doing.

Regardless of what decision is made next week on social distancing, this issue is not going to go away. We need to hear some concrete proposals from the Minister on what long-term help the Government plan to provide to solve the crisis. Will he commit to matching the Welsh and Scottish Governments in their commitment to 100% business relief for qualifying night-time economy businesses in the 2021-22 financial year? Will he commit to delaying the rise in VAT for cultural, ticketing and other night-time economy venues in the 2021-22 financial year? Will he pledge that the Government will follow the science, allowing events with the mitigations that have been shown to be effective in trials, such as testing, vaccines or other measures, and allowing venues to open in certain situations?

I end with the words from Matthew from Chalk, a nightclub next to my constituency—100 yards across the border. He said to the APPG that he has invested his life savings in the venue—his blood, sweat and tears. Nightclubs are responsible for life-forming experiences for young people—and those who are less young—and are an integral part of our society. They must be protected. They are an integral part of the economies of many cities and towns across our country, and provide jobs for hundreds of thousands of people. I hope the Minister can give Matthew and many others some reassurances about going forward in the next few weeks, so that we can start to get our businesses opened and our economy supported.

11:10

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) on securing today’s important debate. I thank him for his work and all those colleagues on the all-party parliamentary group for the night time economy, which is a hugely important sector, culturally, economically and for people’s wellbeing.

This area of the economy is being hard-pressed because it is not a binary situation like retail, which is either open or not—obviously there are measures within, but on the whole it is either open or not open. Clearly, restrictions are being put on the hospitality sector, the night-time economy and the wider hospitality sector, such as weddings, and that is happening at a cost, with extra staffing and reduced capacity for those venues. They have been incredibly hard-pressed.

The sector also creates millions of local jobs. Many sectors and industries within hospitality—events and entertainment, healthcare, security, cleaning, transport, logistics, retail, health and fitness centres—are all part of the hospitality ecosystem. The sector is also key in driving other vital sectors of the economy, including tourism, entertainment, the arts and cultural activities, such as theatres and comedy clubs. We recognise the huge disruptions that the covid-19 pandemic has caused to people’s lives. It has presented unprecedented challenges to those sectors.

The Prime Minister’s road map is an important step towards reopening the night-time economy, but we need to be driven by the data and proceed cautiously towards step four. That is why we have opened the economy in gradual steps, as it is vital that we do not jeopardise the success of the vaccination programme. I hope this debate will go some way to restoring public confidence and kick-starting recovery for the industry to make sure that people in the sector know that everybody in this place, from either side of the House, is fully committed to making sure that we can restore our night-time industry.

The hon. Member for Brighton, Kemptown talked about December and what happened at Christmas. For that reason we are going through the gears gradually, carefully and slowly. We have been at pains to talk about the fact that it is “data not dates”. Everyone will obviously put their hook on 21 June, but although—to provide enough certainty—we have said that that is what we are aiming for, we have been really careful to say that the decision needs to be based on data. Caseload, case rates, the effect of the vaccination on variants, the roll-out of the vaccination programme, and obviously hospitalisations and the pressure on the NHS, are among the things that we are testing and gathering evidence for. Every day that we continue with that process, we are getting richer data.

The promise has been clear that the decision will be made and announced on 14 June. I appreciate that, for some businesses—especially those producing real ale, as it takes a couple of weeks to brew and, as the hon. Gentleman says, it has a short shelf life—that will not be enough time. However, the key thing is that the full opening up would not be before 21 June. Media speculation does not help and I have been at pains, when speaking to newspapers and TV, to ask them not to speculate for speculation’s sake. That causes cancellations, especially for events that require planning, such as certain nightclubs, weddings or ticketed events. That speculation is harming business.

[Jim Shannon (Strangford) (DUP)]

First, I congratulate the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) on bringing the matter forward. He is right; it is the uncertainty. We understand the issues to do with the timescale and then it falls back, but I want to make a plea, to back up the hon. Gentleman, for those workers. In my constituency, I know that some have had real uncertainty over the future of their jobs. First, they are on furlough. Then, they are off furlough. Then, something else happens and they find themselves off furlough and they cannot get back on again. Can the Minister say what consideration the Government have given for businesses that have furloughed some of their staff, have taken them off with an option of opening and then find themselves in the predicament where they wish they had not taken them off furlough to start with? Also, what discussion has the Minister had with the devolved Administrations?

[Paul Scully]

That is an interesting point. I am grateful for the hon. Gentleman’s intervention. It is a really important point. I will come back to staffing overall in a second. He is right. I have had some interesting discussions with the hospitality sector over the past week or two, since the last reopening, when they have been looking at staffing issues. A number of people have come up with different ways of covering the staff shortages they have outlined. First, it is difficult to get some people back from furlough, because they are happy and prefer to be on furlough. They may be cautious about coming back to the workplace and have not the confidence to do so.

There are clearly some people who have left the country, especially in London and the likes of Brighton, where we rely on a significant number of workers from Europe and around the world. There are rural and coastal areas where businesses struggle to find people in general. There are also people on furlough who may have been running two jobs and have made a choice. For whatever reason, possibly because of the speculation that I was discussing about the uncertainty of hospitality and the night-time economy reopening, they have chosen to go to their other job—the non-hospitality job. That clearly provides a challenge and is something that we have to work through and be alive to.

The hon. Member for Brighton, Kemptown talked specifically about security staff and the need to maintain safe venues. Clearly that is something that we are aware of and we are working through the Home Office to see what more we can do to support them.

I shall return briefly to the road map. The Prime Minister has the step-by-step plan to be led by the data as we ease restrictions. We have progressed through that road map, on the basis of the latest data, easing restrictions further when it has been safe to do so. We want to make sure that as the night-time economy and hospitality reopen, we remind people that the hospitality sector has done so much to put mitigations in place—the time, the money, the effort, the staff, the one-way systems, the screens and what-have-you. We want to reassure people that they are safe by following the guidance and putting those measures in place, but providing a really warm welcome as well. We want people to go out and enjoy themselves. We want to give them the confidence to come out on the first day and make sure that they have enjoyed a fun time and want to come back time and again. As we break the cycle of people being locked away at home, we do not want them to necessarily just sit there and contain themselves with their bottle of wine and ready meal in their garden, because there is so much that Brighton, London and Northern Ireland have to offer in the night-time economy.

[Lloyd Russell-Moyle]

Could the Minister address one request that I get a lot from the night-time economy, by giving some pre-guidelines of what the opening up might look like, even if that were to change? Looking at another sector, I went to visit my local caravan club site recently. They were given three days, from the announcement to open up the site, to implement the measures that the Government required. If they had been given just a week, they told me, even if it was to say, “This is what we are currently thinking; it might change, but this is where you can start planning,” it would have really helped.

Could we learn that lesson with the night-time economy and give them a heads-up? Could we say, “This is where the current thinking is. We don’t know the date when it will happen—it might be this week, next week or the week after—but this is roughly what it will look like when you are opening up”? Could we make it clear whether it will be a free-for-all when we do, or whether it will be a case of, “You can open up, but here are the requirements that you will have to meet”? That would make a big difference for a lot of these venues.

[Paul Scully]

I thank the hon. Gentleman and totally accept that. We are in a frustrating period; it is frustrating for all of us. None of us wants this to go on for a day longer than possible, but as he knows, a number of reviews are under way—the certification review, the social distancing review and the events pilot—all of which are due to be completed this week. They will not only inform the Prime Minister in making his decision ahead of 21 June, but inform us of what works, what might not work and so on for larger events and for social distancing.

In all this, we have worked with organisations such as UKHospitality, Hospitality Ulster, the British Beer and Pub Association and the Night Time Industries Association to try to get a view about what the effects of any residual social distancing and mitigations will be on their economy. We can therefore get the balance right in giving them a chance to make a profit. Let us bear in mind that every time we walk down a street at the moment and see a busy, bustling pub, it is still losing money; it is just minimising cash burn and minimising its losses. It is not making money. It has not got a chance of making money until it can open fully, because of the capacity issues. As I say, it might look busy, but it is still constrained.

I cannot give the hon. Gentleman the exact answer that he wants and that the sector needs, but we are trying our best to ensure that we can work with the sector and have a dialogue rather than just say, “Okay, this is the kind of stuff we are going to do. What do you think about it?” At every stage it has been difficult to work through those dates as we have come through them, but I believe that we will get there.

I know that not every venue will open fully on 21 June, because that is what happened on the other two dates as well. That is the date, and different people will work through their venues to best suit their staff rotas, their suppliers and perhaps just ensure that they can give that safe and warm welcome. We want to ensure that the Government’s programme is one-directional; and clearly, businesses do not want to be stop-starting because of economic constraints of a more local making, shall we say.

There were a number of issues on financial support. Let me first cover the rents moratorium. Throughout the process we have had a number of cliff-edge scenarios that we have tried to avoid, whether the end of the business rates holiday or the VAT relief. Those are big-ticket items. If I remember rightly—I might get these the wrong way round—business rates was about £11 billion of taxpayers’ money and VAT was something like £27 billion. It was of that order. Those are big amounts of money, so we clearly need to work that through in a holistic fashion for the Chancellor, but we have always tried to flex to view the situation as is, rather than try to predict too far into the future. Clearly, I do not think any of us expected us to be in this situation in March or April last year, when the pandemic Budget was announced.

The moratorium is the one complicated issue. Business rates relief is the Chancellor saying, “Okay, fine, we can extend this. The Treasury will take the hit.” I understand that ultimately it is taxpayers’ money, but the Treasury will take that view and it is the Treasury’s decision. On rent moratoriums, there is clearly a commercial rent, and landlords are businesses as well. We sometimes look at rogue landlords, but there are many mom-and-pop owners who own a property or two. There are also pension funds that own property, and that has ramifications on pensioners and investors in those pensions. Obviously, some landlords also have shareholders.

We must therefore look carefully at getting the right balance, but we are working through that as quickly as possible because we know that the most immediate effect will be on tenants. It will be on those hospitality venues who, for the reasons we have said, cannot operate to capacity very quickly. We are hoping to come up with something that works for both tenants and landlords and furthers those discussions. We want to have constructive discussions, as the hon. Gentleman said, because it is in the landlords’ long-term interests to ensure that they can do so. Beyond that, we will make sure that we can get to more of a fundamental review of the landlord-tenant relationship, because the hon. Gentleman is absolutely right to talk about how we go beyond reopening.

I have been working with the hospitality sector on the strategy—what we do next. Bear in mind that our Department did not have a hospitality team before all this, but we now have a permanent hospitality team within the Department, and I now include Hospitality Recovery Minister in my vast array of titles and responsibilities. It is important that the hospitality industry has the seat at the table that it worked so hard for.

There are three Rs: reopening—we have to get back to full capacity to start making money again and start paying back the three years of debt that the hon. Gentleman talked about. Then, recovery—going through that process, starting to have more easements from local authorities to help support that. It is also about resilience, which brings us back to the long-term issue of staffing. What makes hospitality so flexible is that it has a low bar for entry. A student can go in and do a few shifts at a pub without any qualifications. But we want to make sure that people can see a career path in hospitality, so that although there is a degree of flexibility, that is not the same as instability. We want to give that stability through a greater skills offering for the hospitality sector. As we build back better and fairer for the workers in that sector, we will also build back greener, seeing what more we can do to further the Government priority of driving towards net zero, by means of practices in the hospitality sector. There is a lot to be working on.

We are gradually removing restrictions and reopening the economy via the road map. It is a frustrating time, waiting for Monday to see what the decision is, but we have to remain cautious and continue to follow advice on safe behaviours. It is key that we remind people that this is not like a thriller movie, when someone shoots the baddie at the end and the credits roll. We will be living with this for some time. In the meantime, hon. Members are sitting with their masks on because we need to remember social distancing, “hands, face, space and fresh air” and get the vaccine when it is offered.

We will continue to work closely with businesses, local authorities and other stakeholders to support those industries and ensure that the UK night-time economy can recover and return stronger. As we continue those reviews in tandem with the vaccine programme, we are hopeful that further venues will be able to reopen as we approach step four of the road map. That will be no earlier than 21 June, following a review of data. Protecting the health and safety of the British public is our top priority, but we will not keep the restrictions in place any longer than necessary. Until then, everyone must continue to play their part.

Question put and agreed to.

11.28 am

Sitting suspended.