Hospitality Industry: Government Support

Greg Clark Excerpts
Monday 11th January 2021

(1 month, 3 weeks ago)

Westminster Hall

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Department for Business, Energy and Industrial Strategy
Graham Stringer Portrait Graham Stringer (in the Chair)
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I think it would be appropriate to impose a time limit of three minutes.

Greg Clark Portrait Greg Clark (Tunbridge Wells) (Con)
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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.

Rupa Huq Portrait Dr Rupa Huq (Ealing Central and Acton) (Lab)
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To say that the coronavirus has been a shock to the system is an understatement. What was once a health crisis spread quickly to become an economic crisis—indeed, the biggest recession on record. The multimillion-employing hospitality industry has been particularly hard hit, adding to existing, pre-covid woes over Brexit supply chains and the loss of its international workforce. Hospitality drives the health of our high streets and the viability of our suburbs and towns. A lot of these business are family run—I know: my late dad was an Indian restaurant person himself. All of these things are now facing existential threat. At the other end of the scale, the collapse of big chains such as Carluccio’s, Pizza Express and even Jamie Oliver outlets would ordinarily be big news, but these are not ordinary times, and with the worst death toll in Europe, we hear barely a whisper about them.

I never thought I would live to see the day when a Conservative Government would forcibly shut down businesses, but here we are again. A dedicated Government Minister for hospitality would give food, beverage and leisure accommodation a proper say, rather than them always being an afterthought, suffering the consequences of the latest failed experiment—the tiering system, the 10 pm curfew or whatever it is. At a time of distancing and isolation, a sector based on togetherness and sociability cannot exist on takeaway only. This sector spent a fortune on remodelling, even though social distancing slashes the number of covers available: people instituted one-way systems, enhanced cleaning, and screens to create a covid-secure environment, all seemingly now for nothing. These people are famed for hard work and resilience, but they cannot run on empty, and no one clapped when they provided meals for NHS staff or for children, outside of the Government’s initial, cruel insistence that they would not run the free school meals scheme in the holidays.

Coronageddon should not relegate hospitality to being the easiest lever to pull: first into lockdown, last out, in this zig-zag, stop-start way. These businesses need cash flow, and they need to plan for things like fresh produce orders and staffing rotas. As the MP who first spoke of a “curry crisis”, I implore the Minister: the sector is fighting for survival, and bold action is needed. Now is the time for a dedicated Minister, plus additional financial support, extending furlough and rent, rates and VAT relief, because we will all need restaurants, hotels and pubs. Some 56 pubs a week are closing at the moment; that is a matter of shame. We will all need them to get us out of the other side and build consumer confidence.