Hospitality Businesses

Tuesday 27th January 2026 Lords Chamber

Question

14:52

Asked by

[Lord Sharpe of Epsom]

To ask His Majesty’s Government what steps they are taking to support hospitality businesses.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, hospitality businesses are fundamental to the life of our communities. As such, we are introducing permanently lower business rates for eligible retail, hospitality and leisure businesses, and a £4.3 billion support package over three years to shield rate payers from bill increases following the revaluation. In addition, the Chancellor announced earlier today that every pub and live music venue will receive 50% off their new business rates on top of this support, and bills will be frozen for two years. Moving forward, we will review the valuation methodology for pubs and hotels as well.

[Lord Sharpe of Epsom (Con)]

My Lords, the Government’s announcements are welcome, as far as they go, and will provide some short-term relief to three out of four pubs, but in three years’ time, when the discounts and the freeze end, bills will still rise by 76%. Also, there was nothing for hotels beyond a review of valuation methodology, despite the fact that hotels’ rates will rise by 115% over three years. Why do the Government not just apply the 20p discount that is allowed in legislation across the entire hospitality sector, instead of the current 5p? That proposal has the virtue of being much simpler and cleaner than endless reviews and freezes. Why is this relief restricted to three years, and when will the review of hotel rates be delivered?

[Lord Stockwood (Lab)]

Business rate reform has been on the agenda for the last number of Parliaments and this Government have taken it on. Since I came into government six months ago, I have been proud that our overall objectives have been about stability in our economy, bringing down inflation—it is on target for next year—and making sure that consumers have more money that they can spend in the hospitality industry. Alongside that, the review of overall business rates and the commitment of £4.3 billion mean that over a third of businesses will pay no business rates, over half of ratepayers will see no increases and 23% will see their bills going down. This is funded by targeting those with higher rateable values. Overall, while the main thing is bringing stability to the economy and bringing inflation down to make sure that consumers are spending, reform of revaluation is increasingly important as well.

[Lord Fox (LD)]

My Lords, while, of course, there is a need for holistic reform of business rates—the Liberal Democrats have long proposed a commercial land- owner levy—in the short term, just as the noble Lord, Lord Sharpe, suggested, reducing the retail, hospitality and leisure multiplier by 20p, as opposed to the Government’s 5p, would make a big difference. The whole retail and high street sector has been hit by this—not just pubs or hospitality—so does the Minister recognise that the current proposals, while welcome, are too small and narrow to help our high streets?

[Lord Stockwood (Lab)]

I clearly acknowledge that there are challenges in the economy that are not of the making of the last 18 months alone. Changing consumer behaviours post Covid are a challenge for our overall economy. However, to restate what I said before, we need to get the economy back on track overall and ensure that we have fiscal responsibility. This package alone will cost us £4.3 billion. The additional announcements today on pubs and live music venues take that even further. On average, that relief will be more than £1,600 per pub. We have to do all that while balancing the overall needs of the economy with fiscal responsibility, which the Government set out as major proposals.

[Lord John of Southwark (Lab)]

My Lords, in my maiden speech last week, I spoke about the important role that local government can and should play in creating and curating place. With that in mind, does my noble friend the Minister agree that local authorities can be good and effective champions for the hospitality and retail sectors in their areas?

[Lord Stockwood (Lab)]

I welcome the noble Lord to the Chamber and thank him for his question. The national government policy that has been announced since we came in is critical, and local government is an even more critical part of leadership in our communities. Not only do local authorities offer the vision and ability to enact what is relevant to each community but they are close enough to the hospitality sector and individual high streets to know what is needed. I thank the noble Lord for his contributions so far and look forward to working with him.

[The Earl of Devon (CB)]

My Lords—

[Lord Harper (Con)]

My Lords—

[Lord Swire (Con)]

My Lords—

[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

We will hear from the Cross Benches next, then we will go to the Conservative Benches.

[The Earl of Devon (CB)]

My Lords, hospitality businesses across the south-west of England, particularly those in our coastal and rural areas beloved of tourists, suffer from an inability to attract staff in specialist roles. A major cause of this is a chronic lack of suitable housing, particularly due to planning restrictions and the popularity of second homes. What steps are His Majesty’s Government taking to ensure that housing is available for those seeking a career in hospitality in our rural and coastal communities? I note my interest as the owner of a hospitality business in Devon.

[Lord Stockwood (Lab)]

I believe the original Question was about helping the hospitality sector. The comment about housing is outside the purview of my domain of expertise as Minister for Investment. However, the Government are investing in young people’s futures holistically. We have seen a sharp decline in apprenticeships. We are trying to implement a new foundation apprenticeship to give young people a route into critical sectors. While I acknowledge that housing is a critical part of that, making the economy grow more holistically is a way that we can ensure that the hospitality sector works in its own right.

[Lord Harper (Con)]

My Lords—

[Lord Swire (Con)]

My Lords—

[Lord Kennedy of Southwark (Lab Co-op)]

Can you please decide who is going to ask a question on the Conservative Benches?

[Lord Harper (Con)]

I am grateful to my noble friend. I listened very carefully to the Minister, but he did not answer the question about hotels, particularly family-run hotels. Their rates bills are going to rise by even more than pubs’ and there is no help coming for them. What are they to do? They run fantastic businesses, which attract people to rural areas in particular, but they face rises in their business rates of over 100% in April.

[Lord Stockwood (Lab)]

The department is in constant dialogue with all industry sectors, including the hotel sector. We are trying to balance support for the overall economy with the need to be fiscally responsible in this Parliament as well. We continue to take feedback and will respond to that, but today we are focused on cutting rates overall, which, as I have said, has been on the agenda within the last couple of Parliaments, but we have taken it head on.

[Lord Brennan of Canton (Lab)]

My Lords, I note the rather grumpy welcome from the Opposition for the measures that the Government have taken. I say, let the good times roll. This is a tremendous announcement, particularly for pub-goers and for gig-goers. However, is any consideration being given to add to these measures with some relief for recording studios, which are very much part of the R&D of the music industry and are generally accessible to the public as places that they can book for their private use?

[Lord Stockwood (Lab)]

I share the noble Lord’s optimism for the positive steps taken today and generally, in the last five months of being in government, for the way that the economy is shaping up after the last couple of decades. The announcements made today were on the back of the £4.3 billion for rate revaluation and really focused on live music venues and pubs as well. Perhaps I could refer everyone to the Statement made an hour ago. If there are specific follow-ups, I can come back to that, but I do not have any further detail on those venues at the moment.

[Viscount Thurso (LD)]

My Lords, the wider visitor economy, of which the hospitality industry is such a valuable part, is worth some £127 billion a year to the economy and 3.9% of all jobs. It is therefore a valuable export industry. Last year, for the first time for several years, the number of international visitors was down, and the ForwardKeys data for VisitBritain show an 11% drop in long-haul flights. This, as the Minister will know, follows on from several years of cuts to the VisitBritain grant in aid and the Great programme. What are the Government going to do to reverse that?

[Lord Stockwood (Lab)]

There are a number of difficult choices that we are trying to make. The visitor economy is clearly a huge part of who we are and what we should be proud of in this country. The industrial strategy we have set out is around eight key sectors that have comparative advantage to us, but, again, all those are about how we can make the economy stronger overall so that we can have an attractive proposition for all our industries, including our hospitality and the tourism sectors.

[Lord Swire (Con)]

My Lords, given that road safety must be paramount, would the Minister share with us the Government’s current thinking on drink-driving levels? Does he accept that drink-driving campaigners will never cease campaigning until they have zero drink-driving? What assessment have the Government made of the effect on our beleaguered and hard-pressed rural hubs if the levels were to be reduced further than they are now?

[Lord Stockwood (Lab)]

I will have to come back and write to the noble Lord specifically about the drink-driving regulations; I do not have that to hand for this Question. I can tell the noble Lord that this Government are committed to supporting the great British pub. Like many Peers who started their careers in the industry, I worked both as a waiter and as a barman. The Budget is looking not just at the commitments we can make financially but at positive licensing reforms overall, including the first national licensing policy framework. However, I will come back specifically to write to the noble Lord on the question of drink-driving.