Retail and Hospitality Sector

Baroness Monckton of Dallington Forest Excerpts

Thursday 22nd January 2026 Lords Chamber

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[Baroness Monckton of Dallington Forest]

That this House takes note of the impact of Government policy on the retail and hospitality sector.

[Baroness Monckton of Dallington Forest (Con)]

My Lords, I am grateful for the opportunity to lead this important debate. I declare my interest as a non-executive director of the Watches of Switzerland Group plc, a FTSE 250 company, and as founder of Team Domenica, a charity based in Brighton which owns and operates a pub—the North Star.

I see that the Deputy Speaker is sitting on the Woolsack. As my noble friend Lord Borwick pointed out to me, the Woolsack symbolises the economic foundation of the nation from the days when the wool trade was of huge importance to England. The fact that the Lord Speaker presides on this wool-stuffed cushion demonstrates that government is supported by business. But this Government are the most anti-business that I can remember. Perhaps because no one in the Cabinet has any experience of running a business, they simply have no empathy or understanding of its risks and challenges.

I do not understand how the Government can claim to be helping hospitality, small businesses and retail. Admittedly, in her most recent Budget, the Chancellor added a new lower rate multiplier but, at the same time, removed previous relief and massively revalued all the rates upwards, leaving pubs facing eye-watering increases. She also announced that business rate discounts would fall from 75% to 40% and that, from April, there would be no further discounts.

As Mark Wrigley, a publican in Manchester, wrote:

“Two years ago, we paid £9,000 in rates, which rose to £13,000 in 2025. But this year, it has more than doubled to £31,000. Within three years, it is expected to reach £42,000”.


He said that these figures are based on the so-called rateable value—a calculation that often seems plucked from thin air. He wrote that the pub’s rateable value

“is a scarcely believable £97,000”;

his annual rent is £70,000.

“So the RV is 40 per cent higher than the rent … And the madness gets worse. When we compare our RV to other pubs and bars on our street, some of them pay much less, while one of them has seen its RV soar from £50,000 to a frankly ludicrous £165,000”.


And this is being replicated across the country.

Pubs are facing an average tax rise of 76%, while hotels’ tax bills are going up by 115%. Utility costs have risen by 57% in the last five years. Ed Miliband’s energy policies have not helped, although perhaps he might feel that, with every pub that closes, we are getting closer to net zero.

One pub a day closed last year. Just think for a moment what this means for rural communities, for employment and for the social fabric of our country. When a pub shuts, a small part of England dies. Particularly in rural England, local pubs are vital to combat loneliness and social isolation. They are places that welcome everybody: places where you belong as soon as you walk in the door; places where you do not need to be invited to visit; places which are, literally, home from home for many.

If the Prime Minister’s local pub, the Pineapple, in north London closed, he could easily find somewhere else to slake his thirst, drown his sorrows and contemplate his U-turns. In rural villages, which have already seen shops and post offices close, there would be nowhere else to go. The Government’s proposed intensification of the drink-driving laws is clearly designed to stop these locals getting into the car and going to the next village—if, indeed, the pub there remains open.

The Chancellor is effectively destroying pubs, as much as if it were her very purpose. An estimated 89,000 jobs were lost in the hospitality sector after her first Budget. UKHospitality predicts that a further 100,000 jobs are at risk after the November Budget. This week, we learned that, in the month after that Budget, the number of staff on payrolls fell by more than 42,000—the biggest fall in the number of workers since the pandemic. The lowering of the NI employer threshold seems to have been designed to kill off starter jobs which are at the heart of the hospitality and retail industries.

Flexible working is key in both hospitality and retail. As Sam Carlisle, a rural restaurateur, eloquently put it:

“These are jobs that fit around lives”.


If zero-hours contracts are abolished under the Employment Rights Act, as planned, hospitality businesses might as well close altogether. I know from my own experience at the North Star that you must monitor rotas minutely.

Retail and hospitality are significant and huge players in the economy. These sectors are less impacted by AI and should therefore be stimulated to grow and expand. This is where the human jobs of the future will be, and fiscal policy should be supporting them, not increasing the burden. When people work, their well-being tends to get better; getting them into work will reduce the burden of benefits and reduce the strain on our healthcare system in treating people for depression. When Team Domenica advertised for jobs for our pub, for every job we advertised, we got over 200 applications. What does that tell you?

The Government’s proposal for extending licensing hours is tokenistic: many pubs already close two days a week and are closing earlier in the evenings as they can no longer afford the staff costs. Hospitality employs people from every socioeconomic background, in towns and villages all over the country. The impact of so many policies all at once is confusing and devastating. Put simply, it means that pubs will simply not be able to afford to employ the people who need the job most.

Tom Kerridge, the chef and restaurateur, has gone on record about the 148% surge in costs on one of his establishments. I imagine he now has buyer’s remorse, having been vocal about voting for the Labour Party in the last election—or indeed anyone else who took Keir Starmer at his word when, as leader of the Opposition, he declared:

“my Labour Party is determined … to breathe life back into our high streets”.

He said:

“Small businesses are the beating heart of our economy”.

Instead, they are now on life support.

The are rumours of a U-turn on pubs, but nothing for hotels and restaurants. The hospitality sector must be looked at as a whole. A friend of mine who owns and runs three successful hotels and was planning to start a fourth has changed her mind. Instead, she is having to make redundancies in her existing portfolio and curtail all capital investment. Without such investment, there is no growth. The employer national insurance changes alone cost her £0.5 million on her bottom line.

Hotels are facing a dual tax hike. On top of business rates, there is now going to be an overnight visitor levy, which Labour is allowing mayors to impose. The steep rise in wage costs, national insurance and other regulatory costs means that the 5p discount to the business rates multiplier announced in the Budget is not sufficient to ease these pressures. What is needed is the full 20p discount permitted in legislation.

A new surcharge is being applied to higher-value premises with rateable values above £0.5 million. This is hitting high street shops, supermarkets, hotels and sports clubs. Twice as many retail premises are being hit compared to the online warehouses, which this was supposedly meant for. In its 2024 election manifesto, Labour promised it would

“level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship”.

I think that should now win the Booker Prize for fiction.

Our local town of Heathfield in East Sussex has a charming café, the Pink Cabbage Co, which is run by an energetic, inspirational, entrepreneurial lady called Lucy Howlett. She employs 16 people, all local. The café is always full, the food is delicious and it is an important part of the community. She told me that, after last November’s Budget, having spent months mitigating as much as she could from the previous Budget, she lay on the floor and cried. At the end of that month, having paid all her bills, she had £23. She decided to do tapas nights. Why tapas? Because the food can go on one platter and you can prepare it beforehand, so you need to employ fewer staff. I remember the days when being an entrepreneur meant that you grew your business, you employed more people and you were an important contributor to the economy, not that you had to think of creative ways to lose your employees.

I have spoken previously about Heathfield Ironmongers, which closed after 100 years of trading. Since then, several other businesses in our two-street town have closed their doors. We now have seven charity shops, and there have also suddenly sprung up a Turkish barber and two Vietnamese nail salons—cash only. How can they afford to operate when the traditional English shops have had to close? I wonder.

The Government claim to want more young people in work, but their policies have made it harder for them to find jobs. It is often said that one needs to be cruel to be kind, but the Government’s policies on the minimum wage are kind to be cruel. Subsidising job opportunities and creating state-funded work placements, as the Government are suggesting, is not the answer. Enabling the private sector to employ more people by removing a punitive tax burden is the sustainable way forward.

This Government have said they want long-term growth, but instead, because of the last two Budgets, retailers and hospitality owners are facing harsh financial choices, forcing them to pull back on investment when they should be focusing on growing their businesses and creating job opportunities.

Napoleon, in an ill-judged sneer, described England as a nation of shopkeepers, implying that the English were too materialistic to be focused on profit. The Woolsack signifies a nation driven by trade and commerce, but where are we now? We are a nation of charity shops, boarded-up high streets and a plethora of fake and illegal Harry Potter shops and so-called British tourist shops, which are creeping from Trafalgar Square down Whitehall, as I am sure many noble Lords will have noticed. It is desperately sad that Nelson, on his column after his great victories over Napoleon, should have to witness the state-promoted decline of our nation’s proud history as shopkeepers. I beg to move.

--- Later in debate ---

[Baroness Monckton of Dallington Forest (Con)]

My Lords, I thank all noble Lords for their contributions to this debate, particularly the quartet of maiden speakers.

Briefly, I will run through a few comments. The noble Lord, Lord Hannett, is right, and I agree that history will judge the impact of raising the minimum wage. I thank my noble friend Lady Neville-Rolfe for talking about drink-driving in rural communities. One of our local pubs repurposed an ambulance—they called it the “paralytic unit”—and drove people home, so perhaps there is a business opportunity there for some people. I thank my noble friend Lord Smith of Hindhead for his passionate support of members’ clubs. I congratulate the noble Lord, Lord Forbes of Newcastle, on his maiden speech. I thank the right reverend Prelate the Bishop of Newcastle for telling us about what is happening in Newcastle—I think one of the establishments that closed was called the Pickled Toad, and it is such a shame to lose something with that name.

I also thank my noble friend Lord Borwick for giving us such a vivid description of his birth and for recognising the importance of entrepreneurs. To the noble Lord, Lord Empey, I say that all those issues on town centres and retail are so important. I thank my noble friend Lord Hannan for talking about public spending and the importance of taking ownership of that money.

I particularly single out as a maiden speech that of the noble Baroness, Lady Shah, for expressing what we all think in this House—it is a surreal experience when you join, and I still have not quite got over it myself—and for so bravely sharing her own personal journey and that of her family, with all its sadnesses and challenges.

I thank the noble Lord, Lord Rook, who, despite being teetotal, still raised his glass of lemonade in celebration of pubs, and my noble friend Lord Harlech for raising the issue of historic houses and the challenges that they face, which are so often forgotten.

The noble Lord, Lord John of Southwark, took us on a journey from Weston-super-Mare to the House of Lords, and recognised the challenges that this sector faces. I appreciated that.

If, as the noble Baroness, Lady Jones, says, the Labour employment laws increase employment in the hospitality sector, I shall apologise. If she is not right, it will not be people in this House who suffer.

I thank my noble friend Lord Kempsell for recognising that publicans are very often social workers. I have seen that already in our pub. I thank my noble friend Lord Young for raising indirect harassment. That worries me about my cohort of people with learning disabilities who work in pubs; they have absolutely no social filter whatever—I can imagine we will have some very interesting conversations.

I thank the noble Lord, Lord Fox, for recognising the effect of the national insurance changes and the rates, and for his suggestion of reducing VAT from 20p to 15p, which would make a huge difference to pubs.

I thank the Minister for recognising what needs to happen and giving a shout out to the North Star. I end by saying that you are all welcome to come to Brighton and have a drink.

Motion agreed.