Hospitality Industry: Government Support

Greg Clark Excerpts

Monday 11th January 2021 Westminster Hall

[Greg Clark (Tunbridge Wells) (Con)]

It is a great pleasure to reverse roles, Mr Stringer, and to serve under your chairmanship.

Nearly 10 months ago, I asked the Chancellor in an urgent question to bring in an arrangement to reverse the usual flow of funds from businesses to Her Majesty’s Revenue and Customs, and for the nation to pay the wages of people if—and only if—their employers committed to keep employing them. At the time, I asked for that to be done for a few weeks, but 10 months later it shows how little we knew about the virus then that we should still have in place now what became the furlough scheme. I commend the Chancellor for a crucial intervention that saved millions of jobs that would otherwise have been lost. However, having come this far, and after the investment that has been made in keeping these businesses and jobs alive in the hospitality sector, we must make sure that we get through the next few weeks, so that they can continue to thrive in the future.

The furlough scheme, the business rate holiday, the hospitality grants, the discretionary grants, the VAT cut, the bounce back loans and eat out to help out have all been deployed to help hospitality businesses. However, just as the Government did not expect that this pandemic would be with us for what will soon be well over a year, neither did hospitality businesses, many of which are small, personally run and without access to resources and cash. Yet these are the pubs, cafés and restaurants that will be at the forefront of the recovery when lockdown ends—the first to give job opportunities to young people, to give business to their suppliers and to attract people back to our city centres, high streets and villages across Britain. They will also be first to pay their taxes to the Exchequer.

Last Friday, I met—virtually—several of the people who run hospitality venues in Tunbridge Wells and in Tonbridge and Malling, in a meeting arranged jointly with my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat). In a survey of 36 local hospitality businesses, they established that in the year before the pandemic they had collectively paid £4.4 million in VAT and pay-as-you-earn, and that the value of grants and furlough payments to date that have been paid to them is around £3 million. So whatever the precise figures, the point is that these businesses pay their way, and if they manage to survive they will thrive in the future and help to repay the sums that have been set aside during these last few months.

The requests of the businesspeople I met are straightforward, to make sure that they can get through the next few weeks. They ask for the Government to reconsider the requirement to pay national insurance on furloughed employees, given that, at the moment, zero revenue is coming in; to extend the business rates holiday and VAT cut, to reflect the fact that the closure of businesses has been for much longer than was expected; and to extend the terms of the loan scheme, so that these businesses can finance themselves for these crucial few months and so that, at the end of that time, everyone in this Chamber can join together and look back at a pandemic that is over, raising a drink and celebrating the success of continuing businesses.