Pub and Hospitality Sector

Tuesday 22nd October 2024 Westminster Hall

09:30

[Mr Peter Bedford (Mid Leicestershire) (Con)]

I beg to move,

That this House has considered support for pubs and the hospitality sector.

It is a pleasure to serve under your chairmanship, Ms Vaz. I apologise for my hoarse voice; I can assure hon. Members that it is not as a result of the overuse of pubs and similar venues in my constituency over the weekend.

Over recent months, I have had the privilege of visiting several hospitality venues in my constituency. I think particularly of the Curzon Arms in Woodhouse Eaves, which I reopened over the summer recess; the Forge Inn in Glenfield; the Stamford Arms in Groby; and the Coach and Horses in Markfield, which I have got to know over many years as the local councillor. I thank the many hon. Members who have turned up this morning; the debate is clearly of great interest.

The pub and hospitality sector has long been at the heart of the British economy. From the small countryside pub to big inner-city restaurants, the sector provides countless social and economic benefits for the United Kingdom. It is essential that we understand the challenges faced by the industry and do our utmost to support it to flourish.

The sector provides countless economic benefits to the UK as a whole. It contributes £140 billion in economic activity and provides £54 billion in tax receipts to the Exchequer. In fact, pubs and breweries contribute a whopping £18 billion in taxes to the UK economy.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Will the hon. Gentleman give way?

[Mr Bedford]

If the hon. Gentleman could give me a few moments, I will carry on. The success of UK plc is intrinsically linked to the success of the leisure and hospitality sector. The hospitality sector is a key employer throughout the UK, employing 3.5 million people, many with flexible working arrangements. It is vital for our younger people. As of this year, 51% of 16 to 24-year-olds are employed in the sector, and that plays a crucial role in developing their careers.

In my maiden speech, I stated that social mobility, particularly through apprenticeships, is key to creating a fairer and more just society. Many businesses in this sector offer apprenticeship schemes. Is it not great that someone can start as a trainee, a pot washer, and end up running an entire business? I think that should be applauded.

The sector also provides many social benefits. Hospitality businesses play a crucial role in encouraging socialising. In a country where many, particularly the elderly, often feel isolated and alone, community pubs often provide a place for people to come and feel part of broader society.

I have spoken with local independent brewers in Leicestershire, in particular Everards, and we should also recognise the significant charitable contributions of community pubs. In Leicestershire, 153 independently-run pubs raise more than £1.5 million locally for local charities, which is reinvested in local communities to make them even greater places to live and work. That is invariably why 72% of British adults believe that pubs have a positive impact on the communities that they serve. I take the opportunity to celebrate the positive impact that the hospitality sector has in my constituency. In Mid Leicestershire, our 41 pubs cumulatively support more than 2,000 jobs and contribute £19 million to the Treasury.

However, as we are all aware, the industry has faced many challenges over recent years. What makes the sector so successful is its incredible resilience. There have been many challenges: the covid-19 pandemic, the conflict in Ukraine and various geopolitical challenges have sent input costs spiralling high. The pandemic saw the hospitality industry suffer the biggest economic decline of all sectors. Economic output in the sector between 2019 and 2020 decreased by 42%, and we lost 10% of hospitality businesses during the pandemic. However, industry experts recognise the support that the last Conservative Government offered the industry through the eat out to help out scheme, a temporary cut to VAT and furloughing more than 2.1 million jobs, which limited the impact of the pandemic.

There have also been significant global challenges. The sector’s resilience has been displayed throughout the ongoing cost of living crisis brought on by world events.

[Wendy Chamberlain (North East Fife) (LD)]

The hon. Gentleman talked about the war in Ukraine and the cost of living. Dean Banks, who runs the Haar restaurant in St Andrews, told me that energy costs are a challenge. One of the problems is that energy companies use direct debits to keep hold of companies’ money, so they cannot manage their cash flow. Does the hon. Gentleman agree that that is a real issue?

[Mr Bedford]

The hon. Lady is absolutely right. That applies to domestic consumers and to businesses that have to manage their cash flow, so I absolutely support her comments on energy providers.

The war on Ukraine, which brought about the increase in energy prices, has caused hospitality profit margins to continue to decline. Office for National Statistics data shows that hospitality businesses are more likely to shut their doors for at least two days a week than any other industry. However, once again the industry has expressed its gratitude to the previous Government for their support, particularly through the retail, hospitality and leisure business rates relief scheme, which saved the average hospitality business £12,000 and prevented many small and medium-sized businesses from going bust. The sector is not immune from the effects of over-regulation, which of course stifles creativity and businesses’ ability to grow.

So where are we heading? I will move on to what may happen under the new Government’s plans. With the Budget just around the corner, I implore the Chancellor to do all she can to support, not hinder, the hospitality sector. The sector is clear that it desperately needs a continued reduction in business rates. Many in the sector have stated that they face a cliff edge on 1 April next year if the Government do not extend business rate relief to them. Two pubs shut every day in the UK, and that number will only increase if the relief is not extended.

[John Cooper (Dumfries and Galloway) (Con)]

The point about closures is significant. In Scotland, the Government have imposed minimum unit pricing, which was introduced at 50p per unit of alcohol and has recently risen to 65p. It was intended to reduce alcohol-related deaths—a laudable aim—but unfortunately they rose to 1,277 in 2023, which is an absolute tragedy. The rate of hospitality business closures in Scotland is twice that of England, so does my hon. Friend agree that minimum unit pricing appears to be a blunt instrument that is not helping at all?

[Mr Bedford]

My hon. Friend is absolutely right: minimum unit pricing in Scotland has had adverse consequences and has not benefited his constituents.

The Budget could not only include an increase in business rates for the sector; it is looking more and more likely that the Government are reviewing employers’ national insurance contributions. UKHospitality is clear that an increase in national insurance would be particularly damaging for the sector—that tax on jobs could finish off many businesses that are already on the edge.

The previous Government supported hospitality businesses by freezing alcohol duty for three years and introducing the Brexit pub guarantee. But with the “nightmare before Halloween” Budget on its way, it looks as though the new Government are looking to increase alcohol duty, and that would not be good news.

[Gregory Stafford (Farnham and Bordon) (Con)]

My hon. Friend is making a powerful point about taxes on alcohol. Many pubs are shifting away from being wet pubs and are becoming dry pubs. David Lee, who runs the Holly Bush in Frensham, told me that he wants to be able to serve good quality fresh food, but the VAT on it is really hitting his margins. Does my hon. Friend agree that the Chancellor should look at reducing VAT on fresh food for the hospitality industry?

[Mr Bedford]

My hon. Friend is absolutely right: we should do all we can to support the industry as it recovers from the pandemic, and I hope the Chancellor takes on board his sensible suggestion.

For the hospitality sector, the most concerning part of the Employment Rights Bill, which had its Second Reading yesterday, relates to so-called equality laws, which are being updated to make employers liable for staff being “offended” by third parties. That would in effect turn hospitality managers into banter cops, who will feel duty-bound to step in every time someone makes an off-colour remark or joke. How on earth can we be entering a world in which someone can be deplatformed in their local pub? It is absolute madness.

I move on to another piece of Orwellian legislation. The ban on smoking in beer gardens and outdoor spaces is frankly ludicrous. The nanny state is causing outright economic harm to the industry, and I implore the Government to rethink their proposals.

Finally, I shall mention gambling regulation. There have been reports that taxes on the gambling sector will rise in line with the recommendations of the Institute for Public Policy Research commission on health and prosperity. The increase, worth £46 million, will wipe out the profit of the bingo industry and is likely to cost 8,000 jobs across our local communities. The bingo industry has made it clear that if speculation around the Budget comes to fruition, it will be even more damaging than covid and the energy crisis.

What could we do instead? We could look at cutting beer duty or bringing in 20% draught relief. The UK has one of the highest alcohol duties in Europe. Duty on a pint of 5% beer is 54p, compared with 5p in Germany. A pint of beer is four or five times more expensive in a pub than purchased in a supermarket. The brewery industry is the most taxed sector in the UK, at 40% of its turnover. That is a regressive tax and hits people on the lowest incomes the hardest.

[Mr Richard Holden (Basildon and Billericay) (Con)]

My hon. Friend is making a fantastic speech, covering all aspects of the hospitality sector. An extra benefit of draught beer relief is that 97% of the input into draught beer is made in the UK. That has a big knock-on effect across our agricultural sector. It is a win-win for UK farmers, the UK Exchequer and the hospitality sector. I urge him to continue to press the Government to push for greater relief in that space.

[Mr Bedford]

I thank my right hon. Friend for his intervention. More specifically to help the hospitality business, the draught relief of 20% that has been mentioned—a campaign led by my hon. Friend the Member for Mid Buckinghamshire (Greg Smith)— could see an extra 20 million pints sold a year and create 2,500 jobs, with a boost to the economy of more than £70 million.

We could protect hospitality businesses from the business rate relief changes. Pubs are taxed in a different way from most businesses—not on rateable value based on their rent, but as a calculation of their expected turnover. The ending of the retail hospitality relief would be deeply damaging for the sector, with businesses seeing a quadrupling of their business rates. I agree with the representations made by the British Beer and Pub Association that the relief should be kept until a new business rates framework is introduced.

We could also allow reform in the planning and licensing space. UKHospitality has advocated a more mainstream approach to the application of the planning and licensing framework. That would put pubs at the heart of the village and town centre. Kate Nicholls, CEO of UKHospitality, says:

“Too many hospitality businesses with ambitions to expand and grow are held back and frustrated by the current system.”

I also support the idea that there should be more flexibility for businesses to open later for special occasions, such as the women’s football World cup, to allow punters more time to enjoy the festivities. We could cut national insurance contributions for lower-paid earners and promote apprenticeships more.

The potential increase in employer national insurance contributions will have a massive impact on the UK hospitality sector. Industry experts have strongly criticised any move to make such an increase. They believe there should not be an increase—indeed, that there should be a lower level for lower-paid earners. Furthermore, the apprenticeship system is failing around the country. There needs to be a rethink in reforming the apprenticeship levy to incentivise businesses, particularly in this sector, to invest more and be more agile in how they offer apprenticeships.

In conclusion, I hope the Government take note of today’s debate and introduce measures that will enable our pub and hospitality sector to thrive and grow for the future.

[Several hon. Members rose—]

[Valerie Vaz (in the Chair)]

Right hon. and hon. Members will notice that a lot of Members want to speak and it looks like it is standing room only. I am going to impose an informal two-minute time limit. That does not stop hon. Members from intervening. I call Kim Johnson.

09:44

[Kim Johnson (Liverpool Riverside) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. I thank the hon. Member for Mid Leicestershire (Mr Bedford) for securing the debate. Pubs and hospitality are vital to the economy of my constituency. Every year, the hospitality sector in Liverpool Riverside alone has a turnover of £1.7 billion, employing more than 31,000 people.

I could be biased, but I believe that Liverpool is the best city in the world. Our city centre is home to so many world-famous music venues, bars, pubs and other hospitality venues—from The Cavern on Mathew Street to The Casa on Hope Street and The Jacaranda on Slater Street—and to groups from The Beatles to The Real Thing, recently honoured as the first black group to achieve a No. 1. We are a UNESCO city of music; we have dominated the music charts for years, with 56 No. 1 singles, and we were nominated European capital of culture in 2008. We are a city of clubs and bars and of parties. Most recently, the unforgettable Taylor Swift concerts and Eurovision brought hundreds of thousands of people together and generated millions for our region’s economy. The great events and the people who worked so hard to put them on brought over £80 million to the city.

However, years of unprecedented challenges— including the pandemic, the cost of living crisis and soaring food and energy bills—risk suffocating these cultural institutions and this vibrant sector, placing thousands of businesses and jobs at risk across the country. There are unprecedented levels of closures, with an estimated net loss of 300,000 hospitality venues in 2023, leading to thousands of job losses. More than half of Liverpool’s business rates come from the hospitality sector, with small businesses contributing significantly compared with far larger companies in far more profiteering sectors. High taxes on alcohol make it impossible for pubs to compete with cheap supermarket alcohol, driving consumers out of the safe settings of community pubs that help to promote responsible and sociable drinking.

I know I am short of time, so lastly, we must recognise the immense value of our heritage. Liverpool’s pubs are more than just places to drink—they are historical venues, cultural landmarks and community spaces. They must be protected and we must take action to ensure they are not swept away by planning loopholes and profiteering.

09:47

[Dame Caroline Dinenage (Gosport) (Con)]

I pay tribute to my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for raising this important debate. We can see from the number of people here how much this touches every single one of us. In my constituency, local venues, pubs and restaurants are seeing a triple whammy of pressure with increased wage costs, increased energy costs and the significant rise in business rates as rates relief comes to an end. That is having a massive impact. Nationally, these venues are closing at a rate of 50 a month.

I am reminded of work by the Culture, Media and Sport Select Committee earlier this year looking at grassroots music venues, because of course many pubs and restaurants are live music venues as well. They are also the R&D department of our globally successful music industry—they are vital to it—and they are closing at the rate of two a week. Two things the Committee advocated in our report were, first, a levy to go between the big arenas to the small, independent venues and, secondly, a time-limited and very targeted VAT cut. I would like to make the argument for such a cut for small independent hospitality venues.

I do not want to take the argument purely into numbers, because these venues are so important in the way they make us feel—they can regenerate communities and can address social isolation and loneliness—but they are vital for our local economy and for jobs. In the Gosport constituency alone, these venues employ 2,000 people across 146 venues. They are vital. The knock-on effect of venue closure can be devastating. A time-limited and very targeted VAT cut could be a lifeline for some of the venues that are struggling and still have not got back up to speed and back to pre-pandemic opening hours.

09:49

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Madam Chair. Back in early 2019, I was contacted by the beautiful Glen Mhor hotel on the shores of the Loch Ness, which wanted me to raise at Prime Minister’s questions that its Polish workers, who are vital to the business, were all going back. We all know why that was. Unfortunately, at Prime Minister’s questions, I stood up and invited the then Prime Minister Theresa May to accompany me to the Glen Mhor hotel. I did not get much further than that question because it sounded like an improper suggestion and the House collapsed in laughter. I should add that some weeks later I asked Theresa May another question about space launch in the highlands and she responded that she was very disappointed that I had not once again asked her to accompany me to a hotel.

The point is a serious one. The eastern European workers have been the lifeline and the mainstay of the hospitality business in the highlands, an area where we have depopulation and an ageing population. Very often the hotels, restaurants and pubs struggle to find the people they desperately need to change sheets, wash up, work as kitchen porters and scrub the pans and pots, as we have just heard—I myself was a KP at one point. My point is very simple: I urge the Government to make it as easy as possible for businesses to offer the work that people desperately want and make it as easy as possible for them to come to the United Kingdom and contribute to our hospitality economy.

09:50

[Navendu Mishra (Stockport) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. I thank the hon. Member for Mid Leicestershire (Mr Bedford) for securing this important debate.

Pubs and the hospitality sector play an important part in Stockport and across Britain. In Stockport we have 65 pubs and five breweries supporting 1,590 jobs, creating £29 million in tax and contributing £57 million to the economy. We have several iconic businesses related to the sector, including Robinsons Brewery, which is still family-owned, the award-winning Stockport Gin—it continues to be stocked in the Strangers bar, and I invite Members to check it out—and also iconic pubs including the Magnet and the Sir Robert Peel. The sector has been struggling. The hon. Gentleman made the point that several pubs have closed. I believe in the first half of 2024, 50 pubs closed each month. So far in 2024 there has been a net loss of 94 small independent breweries.

I want to highlight the record of the previous Government—the last 14 years of Conservative Government, including the coalition years—and its impact on our hospitality sector. I am hopeful that the new Government and our capable Minister will deliver for the sector. Maintaining the 75% business rates relief for the retail, hospitality and leisure sector is very important. On business rates, pubs are taxed in a different way from most businesses. Large breweries, often run by multinational firms, are classified as specialist brewery sites for business rates. Small breweries have normal commercial premises for business rates purposes. That means that small breweries can pay 40 times as much per pint in business rates as a global brewer does, so that needs to be looked at to support the sector.

I thank the Campaign for Real Ale, the Society of Independent Brewers and the British Beer and Pub Association for all that they do for the sector, and of course Robinsons, particularly William Robinson, who continue to lobby me.

09:52

[Esther McVey (Tatton) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on securing this debate. As time is tight, I will focus my comments on my constituency.

In Tatton there are 89 pubs and three breweries that support 2,350 jobs, generating £29 million in tax and contributing £60 million to the economy. Recently I wrote to every one of those pubs in Tatton, following the Government’s announcement that an outdoor smoking ban was being considered, to seek their views on that as well as the wider issues facing the hospitality sector. The answers revealed common concerns: business rates, beer duty, employer’s national insurance rises and Labour’s Employment Rights Bill, which is on the front pages of most of the papers today because that will cost businesses £4.5 billion a year. On top of that is Labour’s outdoor smoking ban, which would particularly affect pubs that rely partly or fully on wet-side sales, suggesting the ban would cause a drop in footfall of about 10% to 30%—enough to close more of them down.

It was clear from the responses that the Government should think again and drop the outdoor smoking ban. If they are determined to push ahead, they should at the very least consult the industry and do an impact assessment. I know that is something that this Government do not like and tend to shy away from, but that is what they need to do. Can the Minister inform me if he intends to drop this policy? At the very least, will he consult with the sector and do an impact assessment? I was going to touch on business rates, but I will not have time to do so. I will just say that the relief that the Conservative party brought in needs to be continued until a permanent solution is found.

09:55

[Dr Allison Gardner (Stoke-on-Trent South) (Lab)]

I thank the hon. Member for Mid Leicestershire (Mr Bedford) for bringing forward this fantastic and important debate. I will keep my comments to one issue: the importance of community pubs to villages in my area of Stoke-on-Trent South and surrounding north Staffordshire.

The village of Yarnfield has been fighting for—the Opposition will love this—the Labour in Vain pub. I have taken a photo outside it, which I know will be an internet meme. It is the village’s one and only pub, and the village has been fighting to save it. I will not name and shame, but the owner of the pub is a large chain that has overvalued it, so when the village tried to exercise its right to buy it was delayed and its offer, which was a fair one from an independent valuer, was rejected. We believe, although we are not sure, that the owner is holding out because the land on which the pub sits has valuable planning possibilities. The village of Yarnfield is trying to save its pub for the community.

Hon. Members have talked about young people. The young people of the village are really keen to have the pub not just for their own sake and entertainment, but for the job opportunities that it offers. The village’s right to buy ran out because of the delay by the company. The Government have committed to really supporting communities to have their right to buy, so I would like to know more about what we will do. Maybe we could extend the time and revisit those pubs and communities who have run out of time to get their pub and see how we can help the Labour in Vain.

In my last 10 seconds, I will say that community pubs are valuable. My local pub, the Plume of Feathers in Barlaston, is fantastic. We were delighted that it was allowed, despite restrictions, to have a guest beer named Einstein, which is the best beer in the country—I challenge hon. Members to pick another one.

09:57

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate and to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Mid Leicestershire (Mr Bedford) on setting the scene so well.

I will speak very quickly in my one minute and 50 seconds. Ahead of this debate, the UK Spirits Alliance has stated that one in five pubs says it is at risk of closing. That is the issue before us all and before every constituency across this great United Kingdom. The Northern Ireland hospitality sector is Northern Ireland’s fourth largest private sector employer, with a turnover of some £2 billion. With that in mind, the chief executive officer of Hospitality Ulster, Colin Neill, has done some incredible work to support and help to grow the industry, so we want to keep it growing and keep the initiative and opportunity for jobs and the economy.

The key issue in my council area is tourism, as along with tourism comes the hospitality sector, so it is really important to get this right. The Society of Independent Brewers and Associates says that there are some 1,721 small independent breweries in the UK, with some 10,000 full-time equivalents, which directly contribute some £270 million to GDP each year.

Small independent breweries face restrictions on growing their business. There is a difficulty in recruiting and retaining staff. I suggest to the Minister that the creation of the new immigration pathway to facilitate the introduction of new people to the skills of Northern Ireland and the UK has been a success. There is also the issue of business rates. Pubs are taxed in a different way from most businesses, not on a rateable value based on their rent, but on a calculation of their expected turnover. I once again ask the Minister to create a more level playing field. The Government’s reforms of business rates should include a full review of the differential between a global and a small brewery.

In conclusion—keeping to your two-minute limit, Ms Vaz—there is so much that we can do or discuss to help to support the sustainability and future of our pubs and hospitality sector. I look to the Minister today for commitment and answers on what steps he will take to protect the industry, and I have hope that he will continue to communicate with representatives in Northern Ireland on these issues. I am exhausted from talking.

09:59

[Richard Foord (Honiton and Sidmouth) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. The south-west as a region has the highest number of pubs per capita in the UK, with 75 pubs per 100,000 people. As has already been rehearsed, they are community lifelines, social hubs and local landmarks where we form friendships, celebrate life’s highs and find comfort in life’s lows. Most contribute more than £100,000 annually to our local economy and support dozens of jobs, keeping many family businesses afloat. However, publicans in my area have been telling me about the razor-thin margins they are operating on and the difficulty they are having, as they burn through their remaining savings just to keep the refrigerators running.

I want to draw on the example of one pub in particular, the former George Inn in Chardstock, which was very much the hub of the community—the sort of place that was the living room of the village, where the local skittles team played and villagers met regularly. Owned by the Wellington Pub Company, it closed and the company was happy to just sit on the property as an asset—the hon. Member for Stoke-on-Trent South (Dr Gardner) spoke about that—and see its value inflate. While the company did that, it did not want to do any work on the place and certainly did not want it to operate as a pub. The George Inn Continuity Group in Chardstock has done a fantastic job of bringing the villagers out to campaign to reopen the pub. However, we really need to see reform of the Localism Act 2011. It was a good starting point, but we now need enhanced powers over community assets to help local authorities to protect pubs.

10:01

[Tom Hayes (Bournemouth East) (Lab)]

I am thrilled that the Labour Government value the role of pubs, cafés, restaurants and more in serving Bournemouth and Britain. When I speak with publicans and people involved in the hospitality sector, they tell me that they want Bournemouth to be seen not as a sleepy seaside town, but as a thriving and bustling place to invest, work and live.

Let us take as an example the stretch of Charminster Road between the Broadway pub and Creams. There are 17 different types of cuisine on offer, which are as diverse as the communities that call Charmy home. We have four pubs—the Richmond Arms, the Fiveways, the Broadway and The Dancing Jug—and more than 80% of vendors are independent.

If we move to Boscombe—I know that hon. Members would want to—we have Boscanova. Started by the team behind Bad Hand Coffee, it is a fantastic place that I visited recently and remains a bustling spot for great food made from ingredients sourced in Dorset and Hampshire, and some of the best coffee in Bournemouth. I cannot dwell on Boscombe without talking about Flamingo and Joy Cafe, and Cafe Riva and the Hush Club. The Hush Club almost stopped visiting Cafe Riva because of issues with the council and licensing complaints. I am pleased to have brought people together in recent weeks to keep that going.

If we move over to Southbourne, as again I know hon. Members would want to, there are fantastic places to visit, such as Wild & Ginger, Little Perth, Ludo Lounge, Brewhouse & Kitchen, The Wight Bear, Syd’s Slaps, The Larder House, Dicky’s, Harry’s—I could go on. Moving quickly over to Moordown, if hon. Members fancy a good fish and chips on a Friday night, they might have to queue up, but I recommend they go to Malvern Road Fisheries. Lastly, in Muscliff and Strouden Park, perhaps the best kebab in the whole of Bournemouth East, if not the whole country, is found at Noor. I encourage any and all people to come, any day of the week.

I thank the business improvement districts for all they do to fuel economic growth and the people of Bournemouth East, who invest, set up businesses and help to fuel the hospitality economy, because they are making Bournemouth the amazing place that it is.

[Valerie Vaz (in the Chair)]

I remind hon. Members that I expect to begin the wind-ups at 10.28 am.

10:03

[Robbie Moore (Keighley and Ilkley) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I thank my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for securing this important debate.

In my constituency of Keighley and Ilkley, pubs are a huge part of our local community. They are our meeting place, a place to socialise, and a place to wind down after a busy week or even a busy day, and can also provide a vital place to help to address loneliness, improve mental health and wellbeing, and address socialisation. I aim to recognise the great work of pubs through my own best pub award, drawing positive attention to some of the fantastic pubs from across my constituency.

Previous winners include the Craven Heifer in Addingham, which does a mighty meat pie; The Brown Cow in Keighley, where hon. Members will find one of the best-poured pints of Timothy Taylor’s Landlord; the Goats Head in Steeton, one of the friendliest pubs embedded in the heart of the community; and of course the Haworth Steam Brewery, which always has a fantastic atmosphere and a great vibe, and which is home not only to its own beers but to Howarth gin.

One of the common themes in what all those pubs have told me is that small businesses across our hospitality sector constantly face that battle against Government red tape. That is why the last Government raised the VAT threshold to £90,000, which meant that over 28,000 businesses benefited from not needing to be VAT-registered. I would like a reassurance from the Minister that this Government will not look to reduce that threshold or implement a VAT cut.

I am also concerned by other measures that the Government are rumoured to be looking at, such as employer national insurance or business rates relief— I urge the Government to keep that business rates relief in place—as well as the measures in the Employment Rights Bill, which had its Second Reading yesterday. I cannot stress enough how concerned small businesses are about the challenges that will be created by that Bill. Also, given that the economic analysis was released so late, what are the real unintended consequences to small businesses right across the country?

10:05

[Caroline Voaden (South Devon) (LD)]

I am grateful for the opportunity to contribute to today’s debate about the vital support needed for our pubs and our broader hospitality sector, and I thank the hon. Member for Mid Leicestershire (Mr Bedford) for securing it.

In South Devon, the hospitality industry is more than just a business; it is the lifeblood of our communities. Our area boasts over 700 pubs and restaurants, so there are far too many to name. I will not single any of them out, but they are all brilliant and they employ more than 12,000 people. This sector does not merely create jobs; it fuels our local economy, contributing over £500 million every year. However, we know that many of those venues are at breaking point.

I also want to raise the issue of business rates relief. One family-run hotel in my constituency has been in operation for over 127 years and faces an uncertain future. If the business rates relief cap is lifted, it will be forced to find an additional £110,000 a year just to keep its doors open. For a business that has served our community for generations, that is a real threat to its very survival, and that situation is not unique to South Devon. Across the country, pubs are closing at an alarming rate. Covid presented a huge challenge to the industry, but the fallout from Brexit is still keenly felt. Disrupted supply chains and the increased costs of importing goods, as well as severe staff shortages due to the end of free movement, have all compounded the difficulties for our pubs and restaurants, many of which are now having to shut their doors a couple of days a week, which has a knock-on effect on local communities.

In response to all those mounting challenges, I have written to the Chancellor to urge the Government to extend rate relief for the hospitality sector. Temporary reliefs on business rates and alcohol duties are welcome but insufficient to address the long-term sustainability of the sector. We need bolder reforms that will give our hospitality venues the breathing room they need to invest in their people, their properties and their future. The Liberal Democrats are committed to real and lasting reform, including business rates relief and increasing the employment allowance for small businesses. Policies such as those are not just a lifeline for businesses but an investment in the future of our people, our economy and our communities.

10:07

[Mr Bayo Alaba (Southend East and Rochford) (Lab)]

I thank the hon. Member for Mid Leicestershire (Mr Bedford) for securing this debate. This is a matter close to me because my background is in the hospitality sector. I spent 23 years running and owning bars, pubs, restaurants and festivals, and I provided consultancy services to the industry. In my role as the MP for Southend East and Rochford, I have spoken to a lot of businesses because they are particularly important to the regeneration of the town centre and the high street, and that is something that I have been keenly engaged with.

With all those industries, as some hon. Members have mentioned, it is quite important how they run, plan and make their business. The example that they have given me is the increasing costs from business rates, food, beverages and even wages, which make their businesses quite hard to run. They shoulder that burden, sometimes against the backdrop of increasing antisocial behaviour and decreasing footfall. Those are the challenges that, as I have mentioned before, I faced myself in running my business. I am sure many Members here, once upon a time, worked in pubs and bars as an entry-level job to get into the workplace. We should not underestimate the importance of the soft skills that this sector develops, such as responsibility, punctuality, problem solving and dealing with people from many cultures in different types of situations. Other businesses benefit from those as those individuals move further into the workplace.

It is also worth noting that many operators in this sector, including myself, in some circumstances put their life savings into their business as well. It is important that we support this industry. Pubs and bars provide a vibrant hospitality sector, and it is an industry that helps the next generation prepare for work. Service providers and operators in this sector should be championed for what they provide for our communities.

10:09

[Bradley Thomas (Bromsgrove) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I congratulate my hon. Friend the Member for Mid Leicestershire (Peter Bedford) on securing this important debate.

This topic has already been touched on, but I want to highlight the fact that 81% of British adults agree that pubs are important in bringing people together, while 73% feel that pubs help to combat loneliness in their area and 73% feel that the impact of pubs on their community life is positive. For those reasons alone, pubs should be supported in the current challenging environment. Some more statistics jump out: pubs in the UK contribute more than £34 billion in gross value to our economy and the sector supports more than a million jobs, an increase of more than 100,000 since before the pandemic. In my constituency of Bromsgrove, there are 73 pubs and two breweries, which together support 2,800 jobs, generate £30 million in tax revenue and contribute £95 million to the local economy. In short, those pubs are vital for keeping money within the Bromsgrove economy.

I would like to raise some points about Labour’s proposals, including the lack of clarity about future support, the employment law reform, and the outdoor smoking ban. The Bell and Cross pub in Clent wrote to me to highlight the difficulties that it continues to face in the current operating environment, under the most extreme trading conditions that it has ever seen. Like so many pubs, it wants the Government to commit to extending the business rates relief until the outdated business rates system is fully reformed and VAT on all sales in pubs is reduced. That would allow pubs to thrive as essential and unique venues in towns, high streets and villages across the UK. The Bell and Cross is also concerned about the obligations that the Employment Rights Bill will place upon it, and how the Bill could deter employment into the sector.

I want to put on record my concern about the effects of a potential ban on smoking in outdoor spaces, including pub gardens. That will be contrary to the spirit of liberty and will displace smoking to other locations.

10:12

[James McMurdock (South Basildon and East Thurrock) (Reform)]

I thank the hon. Member for Mid Leicestershire (Mr Bedford) for bringing this debate about a very valid and appreciated topic.

It is fortunate that the specifics have already been set out today, because that allows me to keep things at a high level. I would like to ask the Minister to hear the kind of rallying cries that I am hearing from my constituents, which are: “Save the local pub” and “Save the family breweries”.

There are two things I would like to ask the Minister to focus on. One is to avoid the pitfalls that come with the counter-intuitiveness of the situation he is in and to recognise that, by increasing tax burdens even further, he would actually end up generating less revenue for the Treasury.

In my constituency of South Basildon and East Thurrock, we only have 23 pubs remaining. We have already touched on the alarming rates at which pubs are closing. One example in my constituency, very close to where I grew up, was The Barge, a 200-year-old pub. It is now gone and it will not come back. Those 23 pubs are raising more than £33 million in revenue for the economy, £10 million of which is going in tax. If the Government keeps burdening them, those pubs will close and the Treasury will receive less money.

Furthermore, people who do want to drink and do want to smoke will continue to do so. The hon. Member for Dumfries and Galloway (John Cooper) touched on minimum pricing, but what we are seeing is actually a decrease in people’s health. I would like the Minister to be conscious of the dangers of accidentally worsening the situation in terms of both tax and people’s health. People will drink if they want to and they will smoke if they want to, but in places where they are not regulated, where it is less safe and where no tax will be generated. We must be mindful of that. I will finish by thanking everyone and saying: save our local pubs.

10:14

[Ms Julie Minns (Carlisle) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. May I also add my thanks to the hon. Member for Mid Leicestershire (Mr Bedford) for bringing this debate?

As the Member for Carlisle, I can make a unique claim in this debate: the pubs and breweries of Carlisle were, for a period of 50 years, nationalised. What people drank, where they drank it, and when they drank it were determined just up the road from here, in Whitehall. Understanding that rather unusual state of affairs means returning to 1916: war is raging in Europe and just across the border, in Gretna, lies Europe’s largest munitions factory. Meanwhile, down the road in Carlisle lies one of the finest collections of pubs and breweries. Sadly, the bounteous supply of both beer and ordnance was not a match made in heaven, and the Government nationalised the pubs in 1916, and so that remained until 1973.

The reason that is relevant today is that when those pubs were privatised, they were sold off in large job lots, which means that, even to this day, the majority of our pubs in Carlisle remain in the ownership of the large breweries. What that means for the independent breweries, such as Great Corby, the Carlisle Brewing Company, West Walls Brewing Co. and the Old Vicarage in Walton, is that getting their product into our pubs is difficult. I therefore urge the Minister to raise with his colleagues the application of the pubs code, so that we can ensure that more of our independent breweries have access to the customers in pubs in all our constituencies.

The final point I would like to make, again, to support our wonderful independent breweries, is that we should consider increasing draft beer relief to 20%, which the Society of Independent Brewers and others estimate would be a huge boost not just to our local businesses but to the whole economy.

10:16

[Gareth Davies (Grantham and Bourne) (Con)]

I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on obtaining this important debate. We could talk about the economic contribution of our pubs—the £54 billion of tax revenue, the 3.5 million people employed—but ultimately, as many Members have outlined, their main contribution is the community benefits that our pubs bring to all our communities and constituencies. I have 79 pubs in my constituency, not just in our two towns of Grantham and Bourne, but across our postcard-picture villages, such as the Green Man in Ropsley, the Wishing Well in Dyke and very many others that I could go on to mention—possibly to my benefit when I write to them after this speech.

Those pubs are concerned about the environment that will ensue after the Halloween Budget. They are concerned about the potential national insurance increase, which will break not just Labour’s manifesto commitment but many of our pubs. They are concerned about last night’s Employment Rights Bill and the increased burdens it will place on them, and they are very concerned about the implications of the outdoor smoking ban. In government, we sought to support pubs as best we could with 75% rates relief. We increased the VAT threshold and did many things, such as the Brexit pubs guarantee, that changed the dynamic of alcohol duty to ensure that the pint in the pub always pays less duty than the can of beer in the supermarket.

The Minister will not be able to speculate on what is in the Halloween Budget, but he should know that we are united in this room today on the need to support our pub sector, not just for the economy but for the communities in our constituencies.

10:18

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. I represent the city centre of Edinburgh, so it is impossible to overstate the critical contribution of the hospitality sector, not just to the economy of my constituency but to Scotland and the UK as a whole. For example, the Scottish whisky industry produces £7.2 billion for the UK economy every year and, collectively, visits to distilleries in Scotland are the biggest single-ticketed venue in the UK, and those include Holyrood distillery in the centre of my constituency.

The pub sector in Scotland is absolutely critical, generating £2.3 billion in gross value added contributions in Scotland alone and employing 45,000 workers. Tragically, pubs in Scotland are closing at twice the rate of pubs in England. I want to reassure the House that my Scottish Labour colleagues and I are ensuring that the needs and opportunities presented by the whisky and pub sectors in Scotland are being heard right at the heart of this new Government.

I want to touch on a couple of the contributions made by the pub and hospitality sector beyond the economic. The first is tackling loneliness. Loneliness is as big a killer in this country as cancer, and pubs are critical to tackling it in the community. The second is providing career paths, particularly for the young. The contribution that these jobs make to developing the soft skills that we desperately need in the economy is vastly underestimated. I began my career by working for two years in the restaurant of the Hilton hotel in Glasgow, and that taught me a lot of critical life lessons that I use in this place, so it is important that we get the policy dynamics of this right. That includes tax and incentives, but it also includes the obligations we put on the sector.

We must learn from the Scottish experience of the disastrous deposit return scheme, which has been a real challenge for the sector, and the business rates uncertainty created by the SNP Government in Holyrood.

10:20

[Sarah Bool (South Northamptonshire) (Con)]

I start by thanking my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for securing this debate on pubs and the hospitality industry. In my rural constituency of South Northamptonshire, we have 95 pubs and four breweries; they support 1,950 jobs, generate £26 million in tax and contribute £48 million to the local economy. But pubs contribute so much more than that—and I do not just mean the Towcester Mill Brewery in my constituency providing the Strangers Bar with the famous Bell Ringer beer, well known for its zesty orange marmalade notes and earthy, spicy aftertaste.

I was invited to visit The White Hart in Hackleton in my constituency at the end of September to hear at first hand what it is like to run a pub in 2024. Aside from alcohol duty, VAT and business rates, one of the most striking points from the conversation was what it would actually mean for local people, should the pubs be forced to close. We cannot underestimate the power of the community that is created and fostered in rural areas around the local pub. With the lack of bus services and the wider transport issues, pubs are a crucial source of truly local employment for some villages. I was told of one pub that had taken on a local girl with Down’s syndrome, who would otherwise have struggled to access employment outside the village due to the lack of transport. For her it was a real lifeline, and she developed not only her resumé but her professional and social skills.

My ask for the sector is that we cut VAT, continue the freeze on alcohol duty and extend the current 75% business rate relief for hospitality businesses. Like me, many hon. Members may enjoy settling down of an evening to watch one of our great British soaps, be it “EastEnders”, “Coronation Street” or even “Emmerdale”. And what is at the heart of those? The pub. We must make sure that the scriptwriters do not have to change their scenes because we have destroyed this industry.

10:22

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)]

I commend you for your chairing of this debate, Ms Vaz, and I commend the hon. Member for Mid Leicestershire (Mr Bedford) for securing this debate. I follow my hon. Friend the Member for Stoke-on-Trent South (Dr Gardner), who spoke about the role of the community pub, and the hon. Member for South Northamptonshire (Sarah Bool), who spoke about the importance of the industry, the challenges it faces and the fact that, when hospitality businesses close, the heart of a community is ripped out. The more rural a community is, the bigger the hole that is left.

When the local pub in my constituency was threatened with closure after its lease was up, the PUB stepped in—People United for Banton, not the bar. The village had already lost its post office and its shop and, with the pub about to be turned into residential accommodation, the community stepped in. It formed a management committee, secured community funding and shareholding, and reopened The Swan, fully renovated, in the middle of the pandemic. It is not just a pub; it is the centre and social hub of the community. It is warm and friendly, and last month I was proud to attend the Macmillan coffee morning in the village, along with local councillors. Nearly £2,000 was raised, which isn’t bad for a village of just over 350 people.

We can surely agree that we need a good-quality steak pie —that is really important in my part of the world—good coffee, a nice wee gin, and somewhere to watch the football or dry off after a dog walk. Our pubs are vital.

10:24

[Blake Stephenson (Mid Bedfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz, and I thank my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for securing this important debate.

Pubs and hospitality are at the heart of communities such as mine in Mid Bedfordshire, which is home to 157 hospitality businesses that support 2,229 local jobs and contribute £66 million to our local economy. That includes everything from big chains such as Center Parcs to the Woburn Safari Park and the local pubs, of which there are many to choose from, such as The White Hart in Ampthill; The Chequers in Westoning; The Musgrave Arms in Shillington, affectionately known as the Muzzy; or the award-winning Woolpack inn— the Wooly—in Wilstead.

One of the best ways we can encourage people to visit Mid Bedfordshire and boost our local pubs and hospitality is for the Government to do everything they possibly can to support the inward investment by Universal Studios in my constituency. Universal would be a £50 billion gamechanger to our local economy, and the biggest single boost to turbocharge hospitality in Mid Bedfordshire. But beyond Universal, in the short term, our hospitality businesses need support. They need the Government to protect them by maintaining their manifesto commitment not to raise national insurance, recognising that job-creating small business owners in places like Mid Bedfordshire are working people too, and that employers’ national insurance is a tax on them. Our pubs and hospitality businesses also need the Government to extend the small business rates relief, ensuring that it is viable for them to continue to serve our communities, and our village pubs need the Chancellor to extend the freeze on alcohol duty.

I will conclude by urging the Government to consider the role of pubs and hospitality in making a place in our communities. Wherever houses are built, hospitality must follow; otherwise we risk building expensive dormitories, rather than places people can be proud to call home.

[Valerie Vaz (in the Chair)]

Last but not least, we have two speakers, so if you could each take a minute and a half, we can get the wind-ups in.

10:26

[Joe Morris (Hexham) (Lab)]

Thank you, Madam Chair; it is a pleasure to serve under your chairmanship, and I thank the hon. Member for Mid Leicestershire (Mr Bedford) for securing a very important debate. My constituency of Hexham is home to 116 pubs and nine breweries, spanning 2,200 local jobs, with about 580 of those being worked by people aged between 18 and 24.

I want to start by paying tribute to a lot of those pubs, including The Tannery in Hexham, where I bought my first pint; The Angel of Corbridge, where I went for lunch on Saturday after I went door-knocking; my local, The Crown in Humshaugh; as well as The Falcon in Prudhoe and—particularly—The Samson in Gilsland, which is due to reopen this weekend, having been bought by the community after a longstanding campaign by local people to get their pub back. There are a lot of other pubs I could name, such as The Dipton Mill, Travellers Rest, and The Engine in Walbottle.

Ultimately, these pubs are essential to my local economy. They are essential to so many people and communities in the small towns and villages that dot across the Tyne valley. They are also incredibly important in supporting our tourism sector. Northumberland—as I am sure many hon. Members will be incredibly aware—is probably the most beautiful county in England. We have Hadrian’s wall, one of the most iconic sites of these islands, and somewhere that brings people from all around the world to walk. The advantage of having pubs along the length of Hadrian’s wall is of course that you can find somewhere to stop after a long and often rain-sodden walk along it.

Ultimately, however, they are the route into employment for so many people in my constituency. They are where people learn to cut their teeth and pick up those soft skills that end up serving us so well in later life and in future professions. It is where people learn their responsibilities, and even how to turn up on time.

I would also like to pay tribute to a lot of the pubs that are sadly no longer open in my constituency. They have left a void in their communities. Ahead of the Minister’s remarks, I look forward to hearing what we can do to help communities in future reopen pubs that they have lost.

10:28

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Thank you for calling me, Ms Vaz. It is a pleasure and a privilege to serve under your chairmanship. I start by paying tribute to my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for securing this important debate—important because, like many people who have come before me, I have a constituency with a rich tradition in the world of food and drink. I will save everybody the verbal tour of my constituency and all the pubs, bars and clubs we have all frequented there, but I will say that in the east of England the hospitality and pub scene supports about 250,000 jobs, creates about £2.5 billion of economic value and pays £1.2 billion to the Exchequer every year. It is not just important in terms of economic value and taxes—it supports our critical tourism industry, and within that 11,000 full-time jobs and £700 million in economic value. But there is social value as well—let us not forget the many old people who do not have people to go to at home, who use the pub to speak and have a natter with people in their local community. It also provides an opportunity for young people to get jobs—their first chance to get on the job ladder.

So, why oh why would we take the opportunity to hammer an industry that has been so badly impacted by covid-19, the smoking ban, rates relief, VAT, national insurance contributions, and inhibitive employment rules and regulations, all of which are mad and bad?

In preparing for this speech I came across a quote from Sally, the manager of The Duke in Ipswich, who said:

“All the landlords and ladies I know are in the business to make a living, not a killing!”

So, please let’s not push more of them over the edge.

[Valerie Vaz (in the Chair)]

I call the Lib Dem spokesperson, Sarah Gibson, to speak.

10:30

[Sarah Gibson (Chippenham) (LD)]

It is a pleasure to serve under your chairmanship, Ms Vaz.

I thank the hon. Member for Mid Leicestershire (Mr Bedford) for securing this important debate and I share his concerns about the issues that the hospitality sector faces. Having a background in architecture and construction, I find myself agreeing with him about the need to reform planning and licensing.

I also share the concerns that my hon. Friend the Member for Honiton and Sidmouth (Richard Foord) and the hon. Member for Stoke-on-Trent South (Dr Gardner) expressed about local village pubs. The land they are located on is so valuable for development that there needs to be stronger legislation to secure community assets.

I thank the hon. Member for Southend East and Rochford (Mr Alaba) for noting the importance of this sector in creating entry-level jobs. It is clear from the range of constituencies represented here that pubs and hospitality are important from the top of Scotland down to the south coast of England, and of course to Strangford.

As my hon. Friend the Member for South Devon (Caroline Voaden) mentioned, we all seem to recognise the challenges that this industry faces, from rising energy costs to supply chain issues to a shortage of staff. Despite the support for the industry across the House, we seem to continue to uphold a broken business rates system that is crippling our local pubs. According to the Campaign for Real Ale, our pubs are overpaying on their rate bills by approximately £500 million a year. Therefore, the Liberal Democrats urge this new Government to boost small businesses in the hospitality industry, such as our locally owned pubs, by abolishing business rates and replacing them with a commercial landowner levy.

The previous Conservative Government promised in their 2019 manifesto to review the business rates system and to ease that tax burden. However, on 17 October 2022, the then Chancellor of the Exchequer, the right hon. Member for Godalming and Ash (Jeremy Hunt), told the House that that commitment was:

“Another of the promises I now vainly wish I had not made”. —[Official Report, 17 October 2022; Vol. 720, c. 430.]

Businesses are tired of being treated with such cynicism, and I truly hope that this new Labour Government will not treat businesses like that. After all, reforming the rates system is not just about boosting businesses; it is also about saving our local pubs from disappearing completely. In the last three years, 45 pubs in Wiltshire have stopped trading, which is devastating for the economies of small rural communities, such as those in my constituency.

[Valerie Vaz (in the Chair)]

I call the Opposition spokesperson, Mike Wood.

10:32

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

Thank you, Ms Vaz, for calling me to speak. It is a pleasure to respond to this important debate on behalf of His Majesty’s Official Opposition, and I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on securing it at such a crucial time for the industry.

Pubs and hospitality are a force for good. They are good for the economy, contributing more than £120 billion nationally and delivering £54 billion in tax receipts to the Treasury, which I am sure the Chancellor will be grateful for next week. They are good for jobs, employing 3.5 million people across every age band, from teenagers to pensioners, and with an even gender balance. They are also good for our communities; our pubs, cafés and restaurants are the heart of local life, bringing people together. Indeed, for many villages the pub or café is the last service surviving in the village, offering a community hub that covers everything from jobs clubs and parents and toddler groups through to serving as the village shop, and even—as I saw at one Pub is The Hub initiative in Cornwall—the hairdressers.

Pubs are a force for good socially, helping to tackle the scourge of loneliness and isolation. Few people could have failed to be moved by the advert for Charlie’s Bar last Christmas. It shows an elderly man walking from his house to his wife’s grave, raising his cap to passers-by, only to be blanked, but he finds comfort and companionship in his local in Fermanagh.

Less well celebrated are the hundreds of initiatives up and down the country, such as the Go To Place at Love & Liquor in Codsall in my constituency, which brings 60 or more people together each Wednesday morning for a coffee, a chat and a bit of breakfast. Although we are all too familiar with the dangers of excess drinking, well-regulated and well-run pubs and bars are forces for good for our mental health. The work done by Professor Dunbar at Oxford university shows that people who have a local where they drink regularly in moderation are likely to be happier and more content than those who do not. Their physical and mental health is likely to be better than that of people who do not. They are likely to have more friends on whom they can depend and feel more engaged in their community than people who do not.

Pubs and hospitality venues have, of course, faced a range of pressures over the past few decades, some of which have been referred to. Some are the results of changing consumer demands, preferences and social habits, but others have been exacerbated by policy decisions made here in Westminster and Whitehall, such as the smoking ban, high business rate bills, and alcohol duty rates that are significantly higher than most western European countries.

The previous Government took a range of actions to help to alleviate some of those pressures. They abandoned Labour’s hated duty escalator, which had meant above-inflation rises in duty every single year. They cut beer duty for the first time in half a century, and introduced multiple freezes in duty, which means that beer duty on a pint in a pub is now significantly lower in real terms than it was in 2010. They introduced a reduced rate of duty for draught beer and cider, taking advantage of the freedoms after Brexit. They helped to reduce the huge disparity in the costs that pubs and bars face, compared with supermarkets and off-licences.

The link between duty rates and alcohol consumption is tenuous, but we know that higher taxes on alcohol lead people to switch their drinking from well-regulated licensed premises to drinking at home, and from drinking lower strength beers and ciders to higher alcohol by volume wines and spirits.

Crucially, hospitality and retail business rate relief has meant that small and independent hospitality venues have received 75% off their business rates. That has made the difference for many between being able to continue and being forced to shut their doors for good.

The new Government made a lot of promises before the election, some of which they now seem to be trying to row back from, but pubs and hospitality need them to deliver now, starting with next week’s Budget. The Chancellor needs to start with a cut to alcohol duty. A return to the previous Labour Government’s approach of continuous duty rises would be devastating for many pubs and breweries. That could be done by widening the draught beer duty differential, cutting the cost of draught beers and ciders in pubs, bars and restaurants, and targeting support where it is desperately needed. Above all, the Chancellor needs to finally publish her replacement for business rates with a new system that is fair for the hospitality sector, which pays a disproportionate share of business rate receipts—

[Jamie Stone]

The hon. Gentleman mentions business rates. As the hon. Member for Dumfries and Galloway (John Cooper) said, pubs are closing twice as fast in parts of Scotland than they are on this side of the border. Sir Tim Martin, the boss of Wetherspoons, has in recent days strongly criticised the Scottish Government for their deeply unhelpful attitude to rating. Does the hon. Gentleman agree that the finger should be pointed north of the border too, and that something should be done before more pubs close?

[Mike Wood]

I certainly agree that, although in England the hospitality sector has long had a number of challenges, the picture north of the border is even worse because of decisions made by the Scottish Government.

It is essential that the Chancellor publishes the replacement for business rates. She announced three years ago that she would scrap them, but the sector is still no clearer about what she will bring in instead. It needs clarity next week. If for some reason, even after three years, the Chancellor still cannot say with what she is replacing business rates, she must commit to extending the 75% relief, and not just until next March or the March after but right up until a new system is in place.

Hospitality businesses are particularly impacted by high energy costs. The Government need to make good on the promises to help that they made before the election. The Prime Minister promised to take £53 billion off business energy bills by 2030. I ask the Minister a simple question: how much can hospitality businesses expect their energy bills to fall by next year?

Pubs and hospitality also need the Government to recognise the impact of regulation, no matter how well intentioned, on small hospitality businesses in particular. It was disappointing that neither the Deputy Prime Minister nor the Business Secretary seemed to acknowledge the warnings in their own impact assessment about the harms that could be caused to small businesses in sectors like hospitality by their employment legislation. Those fears are only made worse by reports the Government are considering further regulation, banning smoking in outdoor beer gardens and outside nightclubs. That change would have minimal, if any, health benefits while causing huge damage to venues. It could even have the perverse effect of shifting people from drinking outside in beer gardens to drinking and smoking more inside their homes.

Finally, as has been said, for the many pubs and hospitality venues that are just about getting by, the reported rise in employer’s national insurance contributions could tip many over the edge, making the difference between continuing and closing. If the Chancellor insists on going ahead with this highly damaging jobs tax, then it is even more important that the Government do more to support pubs and hospitality.

I again congratulate my hon. Friend the Member for Mid Leicestershire for bringing this debate, because pubs and hospitality are a force for good. They need and deserve our support.

10:42

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

In the usual way, let me take the opportunity to congratulate the hon. Member for Mid Leicestershire (Mr Bedford) on securing this debate and celebrating the contribution of pubs to life in his constituency. He rightly talked about the contribution that pubs make to social mobility and the journey all the way up to manager that those who start out as pot washers can potentially make. I noted in particular his praise for the Curzon Arms and I can assure him we will consider that as the campaign stop for when we visit his constituency at the next election to try to increase our majority in this House. He, and I hope the whole House, will understand if I briefly praise pubs in my own constituency—the great Horseshoe, where I have been privileged to watch one or two great victories by the Welsh rugby union team, and the Trinity pub where we have celebrated one or two election successes in recent times.

I will not be able to do justice in the time available to me to the richness of the contributions that we have had, for which I apologise to hon. Members across the House. Notwithstanding, let me try to make one or two points and to pick up some of the specific questions that people have outlined. My hon. Friend the Member for Liverpool Riverside (Kim Johnson) celebrated her constituency’s many pubs and venues, some of which I have had the privilege to visit during what seems like Labour’s annual trip to her great city. Perhaps she might like to buy me a round when I next have to visit one of those pubs—[Hon. Members: “Freebies!”] [Laughter.] Perhaps not, then.

My hon. Friend the Member for Stoke-on-Trent South (Dr Gardner) referenced the Labour in Vain pub in her constituency. I am happy to sit down with her and talk about what else might be possible for that pub. She is right to celebrate community-owned pubs; I suspect that she, like me, comes from the Co-operative tradition in our ranks. The Co-operative party has championed the ambitions of many of our communities to own their own pub.

My hon. Friend the Member for Stockport (Navendu Mishra), in his inimitable way, championed the contribution of pubs to the life of his constituents. I hope I will have the opportunity at some point to come up and take advantage of the hospitality there. My hon. Friend the Member for Bournemouth East (Tom Hayes) rightly praised the contribution of business improvement districts to supporting the environment around pubs. The business improvement district in my constituency does a particularly important job working with the police to tackle antisocial behaviour, and I know that work is replicated in business improvement districts across the country. He made an ambitious claim that the best kebab in the country is found in his constituency—I wonder whether others might have a slightly different perspective.

My hon. Friend the Member for Southend East and Rochford (Mr Alaba), who is unfortunately not in his place, rightly championed the soft skills learned by those who work in the pub trade. My hon. Friend the Member for Carlisle (Ms Minns) made an interesting speech—I was not sure quite where it was going to end with the reference to nationalisation, but I look forward to having the opportunity to find out a bit more about the unique history of the pubs in her constituency.

My hon. Friend the Member for Edinburgh East and Musselburgh (Chris Murray) underlined the role of pubs in his constituency and the crucial contribution that Scotch whisky makes not only to the Scottish economy, but to the UK economy as a whole. He will know of the work my right hon. Friend the Minister for Trade Policy and Economic Security is seeking to do to reduce some of the tariffs that Scotch whisky still faces around the world. If I heard him right, I think my hon. Friend the Member for Hexham (Joe Morris) promised to visit all 116 pubs in his constituency before the next election.

The hon. Member for Gosport (Dame Caroline Dinenage) referenced previous work she had done with the Culture, Media and Sport Committee and I will reflect on her contribution and the Committee’s work outside this House, if I may. I hope to touch on the contributions of one or two other hon. Members as I make my way through some of the broader points, where appropriate.

This debate is important because our pubs and the wider hospitality sector are crucial to the UK economy, employing around 2.2 million people across 154,000 businesses and generating revenues of around £52 billion per annum.

[Steff Aquarone (North Norfolk) (LD)]

I am grateful to the Minister for giving way. He is making some important points about the employment generated by the sector. Does he agree that in areas such as North Norfolk, with a huge hospitality industry, greater training opportunities are vital to allow people to have full and flourishing careers in the hospitality sector? Are the Government supportive of extending that franchise?

[Gareth Thomas]

I congratulate the hon. Member on getting his constituency’s pubs into the debate. I look forward to having the opportunity to visit one or two of those in his constituency again. I will come back to the significant point about training, on which I hope we will have some good news for the pubs in his constituency and more generally.

Pubs and hospitality venues are important to local economies. They help to create vibrant towns and cities that we all want to visit, to study, work, live and invest. Pubs help us to celebrate the very essence of life and friendship, to socialise with family and friends, to enjoy music and great sport, and to celebrate the important points in life’s journey. They are crucial to supporting wider social objectives: providing accessible jobs, as other Members have already touched on, helping to support community cohesion and providing welcoming spaces for those who feel isolated and alone to enjoy the company of others.

In short, hospitality is the backbone of our high streets and the lifeblood of so many of our communities. We all know that hospitality businesses are still struggling. At the weekend, the Yorkshire Post published a survey suggesting some 500 pubs had closed in Yorkshire since 2019, which is just one indication of the challenges facing the pub and hospitality industry.

[Jamie Stone]

I value the Minister’s words. Does he accept my earlier point that those businesses could do with getting the eastern European and foreign workers they used to have?

[Gareth Thomas]

I heard the point the hon. Gentleman made, and I want to come to the issue of access to talent to work in pubs and hospitality venues. While we always need to consider issues around visas and the right to work, we can do more to help people in our country to get access to jobs in the pubs and hospitality industry. The point I intend to make in relation to the intervention by the hon. Member for North Norfolk (Steff Aquarone) is pertinent to that.

As I said, we all know that hospitality businesses are struggling to recover from the pandemic, where closures and customer restrictions decimated cash reserves and drove up levels of debt. I say this gently with so many Conservative Members present, but the subsequent cost of living crisis, which was driven in part by the incompetence of previous Governments, has compounded the challenge for hospitality businesses and increased costs, and it has caused real difficulties and challenges for businesses in repaying some of those debts. One thinks in particular of the contribution Liz Truss made to those issues.

[Robbie Moore]

I am sure the Minister will get to it, but I am really keen to understand some of the specifics of what he is doing in his role as the Parliamentary Under-Secretary of State for Business and Trade. What is the nature of his conversations with the Chancellor and the Treasury, specifically around business rates relief, VAT threshold, VAT duty, beer duty and the concerns raised by the likes of UKHospitality with the Employment Rights Bill? I am sure he is getting there, but this side of the House is keen to understand what he is doing in his role in the conversations with the Chancellor on the forthcoming Budget.

[Gareth Thomas]

I am very grateful to the hon. Gentleman for giving me the prompt to get on to the issues around the Budget next week. He will understand, as one or two of his colleagues alluded to earlier, that I will not speculate on what will or will not be included in the Chancellor’s Budget. However, I can say that we recognise the very important role that hospitality businesses play in supporting local economies and communities, and we understand the pressures facing those businesses. When we were in Opposition, one of the biggest complaints we heard from high street businesses was the unfairness of the antiquated system of business rates. I apologise to him—I appreciate it is difficult to hear—but I think one of the reasons his party lost the confidence of the business community was because it had made multiple promises to abolish or reform the business rates system, but never actually got to that issue.

Business rates are particularly unfair for hospitality, leisure and tourism businesses which, as others have alluded to, create 5% of the UK’s GDP but pay 15% of all business rates. Not only is the current system of business rates unfair, but we know that it disincentivises investment, creates uncertainty and places an undue burden on our highstreets, and in the context of this debate, on pubs and hospitality and venues. That is why we included in our manifesto a commitment to reform business rates, and it is why the Chancellor has continued to commit to setting out next steps on that at the next Budget.

[Esther McVey]

I would like to take away some comfort and be able to speak with my pub owners and pub landlords. Will the Minister commit today to speaking to the Chancellor about business rates before the Budget next week? I want him just to confirm that he will be making the representations from today’s debate to the Chancellor before the Budget.

[Gareth Thomas]

I am happy to confirm to the right hon. Lady and the whole House that I will ensure that the Treasury and the Chancellor are aware of the comments made in this debate. She will understand that crucial to the future of pubs and the hospitality industry is getting growth going in our country—in particular, getting more disposable income into the pockets of potential customers of pubs and other hospitality venues.

That is one reason the Prime Minister has made growth the number one mission of the Government. It is why we have already taken a series of steps to underline the significance of growth, from publishing a Green Paper on industrial strategy through to the success of the investment summit last week. It is also why we have introduced the package of measures to make work pay, including the Employment Rights Bill, which the House debated yesterday.

I want to pick up one or two specific points hon. Members made, in particular the reference by the hon. Member for North Norfolk to training. He may know that there has been much frustration across the business community, including from pubs and hospitality businesses, about how the apprenticeship levy works. We have committed to reforming that levy and to giving more focus to the skills needs of businesses.

That is one reason we have already established Skills England, which will have a new partnership with employers at its heart and will transform the existing apprenticeship levy into a more flexible growth and skills levy, to support business and boost opportunities for those living and working in the UK—something the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) will be pleased to hear.

Interventions from the hon. Gentleman, my hon. Friends the Members for Cumbernauld and Kirkintilloch (Katrina Murray) and for Edinburgh East and Musselburgh and the hon. Member for North East Fife (Wendy Chamberlain) provide me with an opportunity to suggest gently that the Scottish Government might want to think again about their decision not to pass on the business rate relief to pubs that the Treasury in London sends them—

[Valerie Vaz (in the Chair)]

Order. Could the Minister start winding up his remarks?

[Gareth Thomas]

Lastly, Ms Vaz, Ofgem has announced a series of measures to protect non-domestic energy customers from poor behaviour by energy suppliers, which I hope will address some of the concerns that we heard on that issue.

[Mike Wood]

On a point of order, Ms Vaz. I should have drawn attention to my entry in the Register of Members’ Financial Interests before I spoke. I hope you will help me to get that on the record.

[Valerie Vaz (in the Chair)]

Yes, thank you. I call Peter Bedford to wind up.

10:58

[Mr Bedford]

I thank the many hon. Members who contributed to today’s debate. We certainly had lots of recommendations for pubs and hospitality venues across the United Kingdom.

Members who have heard the Minister’s response may be a little frustrated that we have not quite got the answers we wanted, particularly in respect of reforms to business rate relief, VAT, the apprenticeship levy, planning and licensing, or a commitment on national insurance and beer duty. I hope the Minister will make representations to the Chancellor and the Treasury to ensure that that vital aspect of support is implemented by the Government. In closing, I ask that the Chancellor, in her upcoming Budget, implements policies that will not hinder the sector, but enable it to flourish and grow.

Question put and agreed to.

Resolved,

That this House has considered support for pubs and the hospitality sector.