Hospitality Industry: Government Support

Ben Lake Excerpts
Monday 11th January 2021

(1 month, 2 weeks ago)

Westminster Hall

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Department for Business, Energy and Industrial Strategy
Damien Moore Portrait Damien Moore (Southport) (Con)
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It is a pleasure to serve under your chairmanship, Mr Stringer. Of all the different sectors that have been coping with this pandemic, the hardest hit has probably been the hospitality sector. To follow on from what the hon. Member for Warrington North (Charlotte Nichols) said, pubs are not just a business; the local is a centre of the community. It helps people. It helps their wellbeing. It quite often helps them to feel more connected to the outside world.

My resort constituency of Southport is a centre of hospitality, and has been for over 150 years. A third of all my businesses in the constituency are based around hospitality, supporting jobs. There are not only the businesses that are static in my constituency; we also have various annual shows. The flower show is the largest independent flower show in the country. We have an air show, a musical fireworks competition, a comedy festival, and a food and drink festival, and in 2017 we attracted 235,000 visitors when we hosted the Open golf championship.

This is a booming industry in my constituency in normal times. In 2015 it accounted for 24% of my local economy, and by 2020 the figure was 30%—a situation that I want to see continue. I want to see the industry not only survive the pandemic, but thrive in future.

I must say to my hon. Friend the Minister that we are very grateful for all the support that the Government have provided. Many Members will go through the menu of things—no pun intended—such as eat out to help out, furlough, business loans and so on. We all know that they have been an absolute lifeline and we are very grateful; my local businesses are very grateful for them.

Looking to the future, we have things such as the town deal that we have put in a bid for. If we get our town deal, we will then get the private finance that will help us to get a brand-new theatre and convention centre, helping all those businesses that are reliant on the one that we have at the moment, which is closed.

I point out to the Minister again that we need a clear road map. We want to work with the industry, in collaboration with the industry. The short notice that we have been giving some of these businesses has been quite wrong. We must not say it on a Thursday if the pubs have to close on the Saturday—and then throw all the beer away. Similarly, we must not ask them to open on a Thursday when they have no beer brewed. We need to work with them, staging the points at which they will open those businesses.

We want to ensure that people feel satisfied. In nearly every survey that has come back, people were satisfied with the covid security in these businesses. We need to extend the VAT support. We need to look at business rates, of course. Beer duty is something that keeps coming up and it is important. A hospitality and tourism recovery fund would help. Giving the industry a voice and a seat at the table with the decision makers is absolutely vital—it is critical.

I asked the owner of Rueters Bar what he thought of the Government’s support so far for businesses in the hospitality sector, and he said, “A dream.” I said to him, “What can we do to help it in the future?” He said, “Continue the dream.” For those who make our dreams become realities, let us ensure that we support our hospitality sector.

Ben Lake Portrait Ben Lake (Ceredigion) (PC)
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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.

James Wild Portrait James Wild (North West Norfolk) (Con)
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It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate.

The restaurants, pubs, hotels, bed and breakfasts, campsites, attractions and other businesses that make up hospitality are a vital part of North West Norfolk’s economy, contributing around £500 million a year and making up about a fifth of the jobs, and 2019 was a record year for that sector. Of course, last year it was a record in the opposite direction. That collapse in demand and the redundancies have hit younger people disproportionately. In these challenging times, the Crown Inn, the Rose and Crown and other premises have adapted by selling takeaway meals, but not being able to sell alcohol in closed containers with those meals is unfair and is having a damaging impact. The rules should be changed. Where there are issues, enforcement should be taken rather than this blanket approach.

These businesses are at the heart of our community. We have only to look at venues such as Bank House, the Anvil Inn and many others that, unable to open, have offered their premises as vaccination centres. Given their importance, my constituents are grateful for the support that the Government put in place to help them bounce back. That has provided a lifeline, but I have been contacted by many businesses that signed the petition and which say that the new lockdown gravely threatens their future after months when they have been unable to open properly and unable to trade. The one-off grants of up to £9,000 are very welcome, but many employers have taken on considerable debt and have to cover national insurance costs for staff who are furloughed. Those businesses tell me that more help is required. It would be tragic, as others have said, if the benefits of the support to date are lost if firms are unable to hang on until the vaccination programme has had the impact that we all hope for.

In July my right hon. Friend the Chancellor responded to calls that many others and I supported to cut VAT to 5%, but the tier restrictions and national lockdown mean that businesses have not had the benefit from the cut, as had been expected, so the cost to the Treasury has been lower. I support the sector’s calls, and I hope the Chancellor will look favourably on continuing that reduction until the end of the year. Extending that and the business rates holiday will help firms to survive and be there when the reopening comes. We all look forward to that reopening as the vaccination programme rolls out to the most at-risk groups. People crave normality: meeting for a meal, going to the theatre and having a pint in a pub. We want those places to be there, so we need a road map to get there.

Finally, we need further action to help the sector. One opportunity is through the Government’s new tourism zones. Norfolk and Suffolk have developed a strong case with a proposal to be the most sustainable place for tourism in the country, with a strong skills offer for young people. The hospitality sector is crucial to our economy and our wellbeing. I urge the Government to continue their unprecedented support and ensure it is well placed to help drive the economic recovery.