Hospitality Sector: Fiscal Support

James Murray Excerpts

Wednesday 31st January 2024 Westminster Hall

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to speak in this debate with you in Chair, Ms Bardell. I begin by congratulating the hon. Member for Stirling (Alyn Smith) on securing this debate on fiscal support for the hospitality sector. I am pleased to be able to respond on behalf of the Opposition. We have heard Members from across the House speaking passionately about the importance of the hospitality sector, in the jobs it brings to local economies, the vitality it brings to our high streets and the enjoyment it brings to all our lives. My hon. Friend the Member for York Central (Rachael Maskell) in particular spoke about the importance of Government policy to the many hospitality venues in her constituency. Not only does the sector provide 3% of the UK’s economic output and billions in tax revenues for the Treasury; it is a central part of our social lives. That is why our constituents value the hospitality sector so greatly and are so keen to support it.

This debate has been an opportunity not only to speak about the policy but to recognise the sector’s central role in British life, including the way that it underpins high streets as places that communities take pride in. Because of time constraints, I will resist the temptation to mention all the cafés, pubs and other venues in my constituency, although I congratulate other Members on their valiant efforts to do so— I particularly commend the hon. Member for Totnes (Anthony Mangnall) for getting so many references into his speech.

In my constituency of Ealing North, it is hard to imagine Pitshanger Lane without Cinnamon café, where I first went with my grandparents many years ago. I thank the café for its excellent coffee and sandwiches, which keep me sustained and happy whenever I pop in as a customer. A few hundred yards away is the Duke of Kent, which is a gem of a pub that I am glad to be able to enjoy, but a couple of miles away is one of my favourite pubs, the Black Horse, which sadly closed just over a year ago. It is such a deep shame to see it boarded up whenever I walk or drive past. It is a sad reminder of the struggle that many hospitality venues face and of the real loss that local communities can feel when they close.

Our analysis shows that we have lost over 6,000 pubs from our high streets since 2010. Many hospitality venues are finding it harder and harder to succeed, because of high inflation, staff shortages, rising rents and the burden of business rates. At the same time, their customers have less money to spend on enjoying what pubs, cafés and restaurants have to offer, because their wages have flatlined, while taxes and the cost of living climb relentlessly.

Many hospitality businesses may have been hopeful when they heard about the Government’s 2019 manifesto promise of a fundamental review of the business rates system. However, the fundamental review never materialised, and trade groups representing businesses on the high street have expressed their disappointment. In March last year, the Federation of Small Businesses stated that

“the 2019 Manifesto commitment to hold a fundamental downward review of business rates has not happened…these changes do not amount to the fundamental overhaul the system needs”.

Meanwhile, the British Retail Consortium said that the Government’s rates review report

“falls far short of the truly fundamental reform that is needed and was promised in the government’s 2019 manifesto.”

In the absence of fundamental action from this Government, Labour is committed to scrapping the current system of business rates and replacing it with a new approach that is fit for the current economy. As the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), has set out, if Labour were in government, we would scrap and replace business rates, and shift the burden away from hospitality and retail businesses on the high street, which continue to shoulder a heavy burden compared with those that operate primarily in the digital economy. Our new system would incentivise investment, promote entrepreneurship and reward businesses that move into empty premises. It would help the hospitality sector to thrive once again. Our plans for business rates form just one part of our five-point plan to reverse years of decline and revitalise local high streets, alongside our commitments to stem rampant energy bills, stamp out late payments, revamp empty shops and tackle antisocial behaviour.

Before the next general election, we expect another Budget, so I would be grateful if the Minister explained what representations he has had from the hospitality sector ahead of the Budget in March and what proposals he is considering to support hospitality this year. I am sure that many businesses will be interested in the Minister’s response. In this year’s general election, the Opposition will offer the change that businesses need: a Government that are ready to work hand in hand with businesses, get the economy growing and do everything we can to support the hospitality sector to thrive.