Hospitality Industry: Government Support

Ben Lake Excerpts

Monday 11th January 2021 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful for the opportunity to contribute to this debate and to speak in support of an industry that is important to Ceredigion. Taken together, hospitality businesses, such as restaurants, cafés, pubs and bars, and the events catering industry employ about 4,500 people in my constituency, equating to more than 16% of all employees, and that is without accounting for the many supply chain jobs that depend on the sector.

For these businesses, measures such as the furlough scheme have proved invaluable, with more than 7,500 workers in Ceredigion supported by it in the early months of the pandemic. Both the VAT reduction and the business rates holiday were warmly welcomed. There can be no denying that these interventions offered the sector lifelines as the pandemic hit and that the Chancellor of the Exchequer was right to bring forward support measures such as the furlough and the self-employment income support schemes, even though they required extraordinary public expenditure. There are strong arguments in favour of continuing this level of intervention for some time yet.

The vaccination programme offers us some hope that we will see the level of covid disruption reduce significantly this year, but hospitality businesses across Ceredigion tell me that they are deeply concerned about their immediate prospects for survival. The hoteliers, restaurateurs, café owners and landlords I speak to fully understand that the pandemic was never going to be an easy time. Their expectations have long been calibrated to focus on basic survival. Support measures have been welcomed, but much of the grant funding has long been spent to cover fixed operating costs that simply cannot be avoided. Too many owners, ineligible for the Government’s income support schemes, have had to deplete their personal savings in order to keep their businesses afloat and their employees in jobs.

The Treasury has received details from the Federation of Small Businesses of a proposal for a directors income support scheme, which I urge the Treasury to consider adopting, as it would help many of these small business owners. I also support the proposals made this afternoon, such as the one-off grant to help businesses to bounce back once restrictions have been eased, and the proposal to pause national insurance contributions for furloughed employees as a way of alleviating the burden on businesses that are still, in many instances, required to remain closed by law.

To inject some much-needed confidence into the sector, I urge the Treasury to consider extending the business rates holiday for the forthcoming financial year, as well as extending the hospitality VAT reduction scheme into 2022. I am aware, of course, that such measures would mean further significant expense for the Exchequer, but I argue that that would be money well spent. Not only would it give businesses in such an important sector the support that they require to see out the pandemic, but it would avoid a terrible situation whereby businesses that have previously received Government support are forced to close for good, leaving their employees without a job and previous Government support or investment being made in vain. In other words, do not spoil the ship for a ha’porth of tar.