Hospitality Sector: Eastleigh Debate
Full Debate: Read Full DebateAngus MacDonald
Main Page: Angus MacDonald (Liberal Democrat - Inverness, Skye and West Ross-shire)Department Debates - View all Angus MacDonald's debates with the Department for Business and Trade
(1 week, 1 day ago)
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My hon. Friend makes an excellent point and I will say more on that shortly. When the previous Conservative Government presided over an historic drop in living standards—the first time British households ended a Parliament worse off than when it began—it is no wonder that the hospitality sector has struggled in recent years. A sector thrives when people have confidence in their financial futures. That confidence has been eroded by years of poor economic management. High streets should be centres of activity, creativity and connection. The Government’s current policies risk turning them into boarded-up remnants of what once was. Hon. Members know that all too well, as we witness the slow erosion of our high streets with each closed pub, restaurant or café.
What reassurances can the Minister provide that the Government are committed to preventing further closures and fostering growth in our high streets? This weekend sees Small Business Saturday, an opportunity to celebrate and support our small businesses. Instead of stifling those businesses with increased taxes, the Government should lift burdens to allow the hospitality sector to thrive. A strong hospitality sector brings busy pubs, bustling hotels, vibrant nightlife and a renewed sense of community spirit. That is what our towns and cities need to recover from years of economic stagnation.
The Government should create economic conditions so that entrepreneurs are clamouring to open new restaurants, cafés, bars and pubs, finally putting a stop to the steady erosion of the sector in our communities. Every closed hospitality venue is not just a lost business but a lost opportunity for social connection and local employment. The Government must step up and deliver policies that support hospitality and ensure a brighter future for our high streets and the communities they serve.
I would like to know the specific steps the Government are taking to support this vital sector and restore hope to our high streets. If we want to see thriving high streets filled with energy and purpose, the Government must act decisively. At the heart of these challenges lies a deeply flawed business rate system. Business rates actively harm productivity by taxing structures and equipment instead of profits or land value. That outdated system discourages investment, stifling innovation and growth. Liberal Democrats have long called for its replacement with a commercial landowner levy, which would tax only the land value of commercial sites. That reform would encourage investment in buildings and infrastructure, reduce taxes in 92% of local authorities, particularly in deprived areas, and shift the administrative burden from businesses to landlords.
For high streets such as those in Eastleigh, that could provide a much-needed lifeline. It would allow businesses to focus on growth and innovation, while alleviating the crisis faced by small enterprises and hospitality venues. Although the Government have announced plans to introduce lower business rates for retail, hospitality and leisure properties from 2026-27, those changes are far too delayed. By the time those reforms take effect, many businesses will already have shut their doors. Moreover, reducing relief for small businesses from 75% to 40% is a devastating blow to thousands of enterprises trying to recover from years of economic strain.
In particular, pubs are bearing an unjust share of the burden. According to the British Beer and Pub Association, despite accounting for just 0.5% of total business turnover, they pay 2.8% of the business rates bill, an overpayment of around £500 million each year. I ask the Minister what plans the Government have to review that inequity.
Apologies for being late. I ask the Minister if the Government have considered the impact on the hospitality industry in Scotland from the national insurance changes? The reason I ask is that we do not have business rates relief in Scotland, and I believe the impact of the changes is going to be massively bad for the hospitality industry.
I thank the Member for his intervention and I am sure that the Minister will take it up in his contribution. However, at the moment the Member in charge has the floor.