Pub and Hospitality Sector

Esther McVey Excerpts

Tuesday 22nd October 2024 Westminster Hall

[Esther McVey (Tatton) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on securing this debate. As time is tight, I will focus my comments on my constituency.

In Tatton there are 89 pubs and three breweries that support 2,350 jobs, generating £29 million in tax and contributing £60 million to the economy. Recently I wrote to every one of those pubs in Tatton, following the Government’s announcement that an outdoor smoking ban was being considered, to seek their views on that as well as the wider issues facing the hospitality sector. The answers revealed common concerns: business rates, beer duty, employer’s national insurance rises and Labour’s Employment Rights Bill, which is on the front pages of most of the papers today because that will cost businesses £4.5 billion a year. On top of that is Labour’s outdoor smoking ban, which would particularly affect pubs that rely partly or fully on wet-side sales, suggesting the ban would cause a drop in footfall of about 10% to 30%—enough to close more of them down.

It was clear from the responses that the Government should think again and drop the outdoor smoking ban. If they are determined to push ahead, they should at the very least consult the industry and do an impact assessment. I know that is something that this Government do not like and tend to shy away from, but that is what they need to do. Can the Minister inform me if he intends to drop this policy? At the very least, will he consult with the sector and do an impact assessment? I was going to touch on business rates, but I will not have time to do so. I will just say that the relief that the Conservative party brought in needs to be continued until a permanent solution is found.

--- Later in debate ---

[Gareth Thomas]

I am very grateful to the hon. Gentleman for giving me the prompt to get on to the issues around the Budget next week. He will understand, as one or two of his colleagues alluded to earlier, that I will not speculate on what will or will not be included in the Chancellor’s Budget. However, I can say that we recognise the very important role that hospitality businesses play in supporting local economies and communities, and we understand the pressures facing those businesses. When we were in Opposition, one of the biggest complaints we heard from high street businesses was the unfairness of the antiquated system of business rates. I apologise to him—I appreciate it is difficult to hear—but I think one of the reasons his party lost the confidence of the business community was because it had made multiple promises to abolish or reform the business rates system, but never actually got to that issue.

Business rates are particularly unfair for hospitality, leisure and tourism businesses which, as others have alluded to, create 5% of the UK’s GDP but pay 15% of all business rates. Not only is the current system of business rates unfair, but we know that it disincentivises investment, creates uncertainty and places an undue burden on our highstreets, and in the context of this debate, on pubs and hospitality and venues. That is why we included in our manifesto a commitment to reform business rates, and it is why the Chancellor has continued to commit to setting out next steps on that at the next Budget.

[Esther McVey]

I would like to take away some comfort and be able to speak with my pub owners and pub landlords. Will the Minister commit today to speaking to the Chancellor about business rates before the Budget next week? I want him just to confirm that he will be making the representations from today’s debate to the Chancellor before the Budget.

[Gareth Thomas]

I am happy to confirm to the right hon. Lady and the whole House that I will ensure that the Treasury and the Chancellor are aware of the comments made in this debate. She will understand that crucial to the future of pubs and the hospitality industry is getting growth going in our country—in particular, getting more disposable income into the pockets of potential customers of pubs and other hospitality venues.

That is one reason the Prime Minister has made growth the number one mission of the Government. It is why we have already taken a series of steps to underline the significance of growth, from publishing a Green Paper on industrial strategy through to the success of the investment summit last week. It is also why we have introduced the package of measures to make work pay, including the Employment Rights Bill, which the House debated yesterday.

I want to pick up one or two specific points hon. Members made, in particular the reference by the hon. Member for North Norfolk to training. He may know that there has been much frustration across the business community, including from pubs and hospitality businesses, about how the apprenticeship levy works. We have committed to reforming that levy and to giving more focus to the skills needs of businesses.

That is one reason we have already established Skills England, which will have a new partnership with employers at its heart and will transform the existing apprenticeship levy into a more flexible growth and skills levy, to support business and boost opportunities for those living and working in the UK—something the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) will be pleased to hear.

Interventions from the hon. Gentleman, my hon. Friends the Members for Cumbernauld and Kirkintilloch (Katrina Murray) and for Edinburgh East and Musselburgh and the hon. Member for North East Fife (Wendy Chamberlain) provide me with an opportunity to suggest gently that the Scottish Government might want to think again about their decision not to pass on the business rate relief to pubs that the Treasury in London sends them—