Tourism: Covid-19

Jerome Mayhew Excerpts

Thursday 10th September 2020 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests, as a former director of a tourism business that has benefited significantly from the Government’s covid interventions. That said, which tourism business has not? As the former managing director of that tourism business, I operated in England, Scotland and Wales—in many of the constituencies represented in the House today—so I know at first hand the existential difficulties that leisure and tourism businesses have gone through during 2020.

Being closed down by the Government in March, at the very lowest ebb of their seasonal cash flow, had countless thousands of domestic tourism businesses, including my own former business, facing the certainty of liquidation in a matter of weeks. Time really mattered. Every Member of the House will recall the desperate pleas for assistance from fundamentally strong businesses at the very edge of a cash flow crisis, but no one at that time could have foreseen how magnificently the Government were going to respond, and how quickly.

The list of Government interventions is literally too long to fit into a short speech, but we all know that they have provided a truly remarkable lifeline to hundreds of thousands of businesses and protected many millions of jobs. Let me mention one intervention in particular: the temporary reduction in VAT to 5% for hospitality and leisure. That one intervention was transformational for the sector’s recovery once lockdown was relaxed on 4 July, allowing vital cash flow to remain in businesses. It also demonstrates just how distorting high taxes are on the economy, as a 10% reduction has had such an impact, reminding us all that lower taxation directly stimulates economic growth.

The Government’s support measures were designed to protect businesses and employment from the initial economic shock of a V-shaped recession, allowing them to adapt in order to survive and then thrive in the new economic climate. The Government cannot do more than this. I recognise that if a business no longer makes commercial sense in the medium term, they cannot pretend that it does. We cannot pay wages indefinitely for jobs that no longer exist in the real world, but that is not the case for many indoor tourism businesses including coaches, which have been referred to in the debate, English language schools and urban businesses. Can this not be recognised?

What we can do when jobs have gone—and what the Government are doing—is to shift economic assistance towards new employment and training, including in tourism. The kickstart project does exactly that. I have visited a business in my constituency that is already looking to take on 50 kickstarters. This will be a fantastic project that will work really well for the domestic tourism businesses.