Pub and Hospitality Sector

Jamie Stone Excerpts

Tuesday 22nd October 2024 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Madam Chair. Back in early 2019, I was contacted by the beautiful Glen Mhor hotel on the shores of the Loch Ness, which wanted me to raise at Prime Minister’s questions that its Polish workers, who are vital to the business, were all going back. We all know why that was. Unfortunately, at Prime Minister’s questions, I stood up and invited the then Prime Minister Theresa May to accompany me to the Glen Mhor hotel. I did not get much further than that question because it sounded like an improper suggestion and the House collapsed in laughter. I should add that some weeks later I asked Theresa May another question about space launch in the highlands and she responded that she was very disappointed that I had not once again asked her to accompany me to a hotel.

The point is a serious one. The eastern European workers have been the lifeline and the mainstay of the hospitality business in the highlands, an area where we have depopulation and an ageing population. Very often the hotels, restaurants and pubs struggle to find the people they desperately need to change sheets, wash up, work as kitchen porters and scrub the pans and pots, as we have just heard—I myself was a KP at one point. My point is very simple: I urge the Government to make it as easy as possible for businesses to offer the work that people desperately want and make it as easy as possible for them to come to the United Kingdom and contribute to our hospitality economy.

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[Mike Wood (Kingswinford and South Staffordshire) (Con)]

Thank you, Ms Vaz, for calling me to speak. It is a pleasure to respond to this important debate on behalf of His Majesty’s Official Opposition, and I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on securing it at such a crucial time for the industry.

Pubs and hospitality are a force for good. They are good for the economy, contributing more than £120 billion nationally and delivering £54 billion in tax receipts to the Treasury, which I am sure the Chancellor will be grateful for next week. They are good for jobs, employing 3.5 million people across every age band, from teenagers to pensioners, and with an even gender balance. They are also good for our communities; our pubs, cafés and restaurants are the heart of local life, bringing people together. Indeed, for many villages the pub or café is the last service surviving in the village, offering a community hub that covers everything from jobs clubs and parents and toddler groups through to serving as the village shop, and even—as I saw at one Pub is The Hub initiative in Cornwall—the hairdressers.

Pubs are a force for good socially, helping to tackle the scourge of loneliness and isolation. Few people could have failed to be moved by the advert for Charlie’s Bar last Christmas. It shows an elderly man walking from his house to his wife’s grave, raising his cap to passers-by, only to be blanked, but he finds comfort and companionship in his local in Fermanagh.

Less well celebrated are the hundreds of initiatives up and down the country, such as the Go To Place at Love & Liquor in Codsall in my constituency, which brings 60 or more people together each Wednesday morning for a coffee, a chat and a bit of breakfast. Although we are all too familiar with the dangers of excess drinking, well-regulated and well-run pubs and bars are forces for good for our mental health. The work done by Professor Dunbar at Oxford university shows that people who have a local where they drink regularly in moderation are likely to be happier and more content than those who do not. Their physical and mental health is likely to be better than that of people who do not. They are likely to have more friends on whom they can depend and feel more engaged in their community than people who do not.

Pubs and hospitality venues have, of course, faced a range of pressures over the past few decades, some of which have been referred to. Some are the results of changing consumer demands, preferences and social habits, but others have been exacerbated by policy decisions made here in Westminster and Whitehall, such as the smoking ban, high business rate bills, and alcohol duty rates that are significantly higher than most western European countries.

The previous Government took a range of actions to help to alleviate some of those pressures. They abandoned Labour’s hated duty escalator, which had meant above-inflation rises in duty every single year. They cut beer duty for the first time in half a century, and introduced multiple freezes in duty, which means that beer duty on a pint in a pub is now significantly lower in real terms than it was in 2010. They introduced a reduced rate of duty for draught beer and cider, taking advantage of the freedoms after Brexit. They helped to reduce the huge disparity in the costs that pubs and bars face, compared with supermarkets and off-licences.

The link between duty rates and alcohol consumption is tenuous, but we know that higher taxes on alcohol lead people to switch their drinking from well-regulated licensed premises to drinking at home, and from drinking lower strength beers and ciders to higher alcohol by volume wines and spirits.

Crucially, hospitality and retail business rate relief has meant that small and independent hospitality venues have received 75% off their business rates. That has made the difference for many between being able to continue and being forced to shut their doors for good.

The new Government made a lot of promises before the election, some of which they now seem to be trying to row back from, but pubs and hospitality need them to deliver now, starting with next week’s Budget. The Chancellor needs to start with a cut to alcohol duty. A return to the previous Labour Government’s approach of continuous duty rises would be devastating for many pubs and breweries. That could be done by widening the draught beer duty differential, cutting the cost of draught beers and ciders in pubs, bars and restaurants, and targeting support where it is desperately needed. Above all, the Chancellor needs to finally publish her replacement for business rates with a new system that is fair for the hospitality sector, which pays a disproportionate share of business rate receipts—

[Jamie Stone]

The hon. Gentleman mentions business rates. As the hon. Member for Dumfries and Galloway (John Cooper) said, pubs are closing twice as fast in parts of Scotland than they are on this side of the border. Sir Tim Martin, the boss of Wetherspoons, has in recent days strongly criticised the Scottish Government for their deeply unhelpful attitude to rating. Does the hon. Gentleman agree that the finger should be pointed north of the border too, and that something should be done before more pubs close?

[Mike Wood]

I certainly agree that, although in England the hospitality sector has long had a number of challenges, the picture north of the border is even worse because of decisions made by the Scottish Government.

It is essential that the Chancellor publishes the replacement for business rates. She announced three years ago that she would scrap them, but the sector is still no clearer about what she will bring in instead. It needs clarity next week. If for some reason, even after three years, the Chancellor still cannot say with what she is replacing business rates, she must commit to extending the 75% relief, and not just until next March or the March after but right up until a new system is in place.

Hospitality businesses are particularly impacted by high energy costs. The Government need to make good on the promises to help that they made before the election. The Prime Minister promised to take £53 billion off business energy bills by 2030. I ask the Minister a simple question: how much can hospitality businesses expect their energy bills to fall by next year?

Pubs and hospitality also need the Government to recognise the impact of regulation, no matter how well intentioned, on small hospitality businesses in particular. It was disappointing that neither the Deputy Prime Minister nor the Business Secretary seemed to acknowledge the warnings in their own impact assessment about the harms that could be caused to small businesses in sectors like hospitality by their employment legislation. Those fears are only made worse by reports the Government are considering further regulation, banning smoking in outdoor beer gardens and outside nightclubs. That change would have minimal, if any, health benefits while causing huge damage to venues. It could even have the perverse effect of shifting people from drinking outside in beer gardens to drinking and smoking more inside their homes.

Finally, as has been said, for the many pubs and hospitality venues that are just about getting by, the reported rise in employer’s national insurance contributions could tip many over the edge, making the difference between continuing and closing. If the Chancellor insists on going ahead with this highly damaging jobs tax, then it is even more important that the Government do more to support pubs and hospitality.

I again congratulate my hon. Friend the Member for Mid Leicestershire for bringing this debate, because pubs and hospitality are a force for good. They need and deserve our support.

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[Gareth Thomas]

I congratulate the hon. Member on getting his constituency’s pubs into the debate. I look forward to having the opportunity to visit one or two of those in his constituency again. I will come back to the significant point about training, on which I hope we will have some good news for the pubs in his constituency and more generally.

Pubs and hospitality venues are important to local economies. They help to create vibrant towns and cities that we all want to visit, to study, work, live and invest. Pubs help us to celebrate the very essence of life and friendship, to socialise with family and friends, to enjoy music and great sport, and to celebrate the important points in life’s journey. They are crucial to supporting wider social objectives: providing accessible jobs, as other Members have already touched on, helping to support community cohesion and providing welcoming spaces for those who feel isolated and alone to enjoy the company of others.

In short, hospitality is the backbone of our high streets and the lifeblood of so many of our communities. We all know that hospitality businesses are still struggling. At the weekend, the Yorkshire Post published a survey suggesting some 500 pubs had closed in Yorkshire since 2019, which is just one indication of the challenges facing the pub and hospitality industry.

[Jamie Stone]

I value the Minister’s words. Does he accept my earlier point that those businesses could do with getting the eastern European and foreign workers they used to have?

[Gareth Thomas]

I heard the point the hon. Gentleman made, and I want to come to the issue of access to talent to work in pubs and hospitality venues. While we always need to consider issues around visas and the right to work, we can do more to help people in our country to get access to jobs in the pubs and hospitality industry. The point I intend to make in relation to the intervention by the hon. Member for North Norfolk (Steff Aquarone) is pertinent to that.

As I said, we all know that hospitality businesses are struggling to recover from the pandemic, where closures and customer restrictions decimated cash reserves and drove up levels of debt. I say this gently with so many Conservative Members present, but the subsequent cost of living crisis, which was driven in part by the incompetence of previous Governments, has compounded the challenge for hospitality businesses and increased costs, and it has caused real difficulties and challenges for businesses in repaying some of those debts. One thinks in particular of the contribution Liz Truss made to those issues.