Hospitality Sector VAT: Local Economies, Employment and Growth

Debate between John Lamont and Gagan Mohindra

Thursday 12th November 2026 Westminster Hall

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

It is a pleasure to serve with you in the Chair, Dr Huq. Whether it is a seaside town in Lancashire or on the Berwickshire coast, the story is much the same. In the coastal town of Eyemouth, next to the harbour, stands Giacopazzi’s, which was established in 1898 by Lorenzo Giacopazzi. Arriving in Scotland on his way to America, he instead decided to stay on the Scottish coast to seek his fortune. The business has been run by his family ever since, becoming famous for its fish and chips and award-winning ice cream. The family has recently invested in a new ice cream factory, a bar and bistro, and holiday accommodation. However, Peter Giacopazzi has written to me, as have many hospitality businesses across my constituency, to say that pressure has never been greater. The costs of employer national insurance, wages, energy and ingredients have all gone up. On top of that sits VAT at 20%.

In the borders, hospitality is the lifeblood of the high street. From the hotels of Kelso and Melrose to the cafés of Hawick and Galashiels and the bed and breakfasts at St Abbs and Coldingham, these businesses are often a town’s largest private employers, providing our young people with the opportunity to take that all-important first step into the world of work.

At the same time, many of these businesses in the Scottish Borders, Scotland and across the UK are competing for customers who might otherwise go to Europe. Our hospitality VAT rate is the second highest in Europe. France, Italy and Spain charge 10%, Ireland charges 9%, and Germany charges only 7%. The consequences are bleak. UKHospitality reports that three hospitality businesses have closed every day this year, and nearly 100,000 jobs have been lost across the sector. There is no doubt that lowering the rate of VAT would help save jobs.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

My hon. Friend is making an excellent speech. As the shadow Minister, my hon. Friend the Member for Grantham and Bourne (Gareth Davies), will be aware, the Laffer curve says that if we tax something, we discourage it. Does my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk agree that the Government’s increase in employer national insurance contributions means they are forcing companies and businesses not to expand and, in some cases, to close down?

[John Lamont]

My hon. Friend makes an excellent point. We taxed smoking to try to stop people smoking, and the Government’s philosophy seems to be that they are taxing jobs to try to stop people being employed.

During the pandemic, hospitality VAT was cut to 5% to help businesses to survive. The Prime Minister has spoken in favour of a rate more aligned with Europe. Last month’s Budget was the chance to make that change, and it was missed. Business rates in Scotland are, of course, devolved so changes to rates in England do nothing for businesses in my constituency. However, VAT is UK-wide, so a cut would reach every hospitality business in the country, including those in the Scottish Borders.

My ask of the Minister, on behalf of the hundreds of businesses across the Scottish Borders that are desperate for financial relief, is that the Government reduce the pressure on businesses by looking again at a reduced VAT rate for the sector. Businesses such as Giacopazzi’s have served our communities for hundreds of years. Let us give them a fighting chance to survive, Minister.

Access to Banking Hubs: Hertfordshire

Debate between John Lamont and Gagan Mohindra

Wednesday 25th June 2025 Westminster Hall

[Mr Mohindra]

Once again, an hon. Member has pre-empted part of my speech. As the hon. Gentleman alludes to, the issue is not specific to the south-east, but occurs across the country. I look forward to reassurance from the Minister in her speech.

The situation is worse in other parts of my constituency. Many of my residents do not have access to any banking services on their high street. That is particularly the case in Abbots Langley where, in 2021, the Barclays branch closed, leaving residents in the town and surrounding area with no access to banking services. The issue matters greatly to people in my constituency. I joined forces with our local Conservative councillors, Vicky Edwards and Ian Campbell, to support a campaign to bring a banking hub to the post office on the high street. I met with the local postmaster and Vicky and Ian recently to discuss the value that would bring to constituents.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

My hon. Friend is making an excellent speech. I have had similar challenges in my constituency in the Scottish Borders. Like him, I have been campaigning for banking hubs—in Selkirk and Eyemouth. Indeed, I presented a petition in the House of Commons a few weeks ago. The banking hub we have in Jedburgh is working very well, but part of the problem for getting new banking hubs is the criteria that Link uses to determine whether a community is suitable. Does my hon. Friend share my concerns, and will he put further pressure on the Minister to persuade Link to extend the criteria, so that more communities can get the benefit of banking hubs?

[Mr Mohindra]

My hon. Friend is a doughty champion for his constituents. Part of my remarks today, and I am sure of others’ later in the debate, concerns that exact point about increasing flexibility. We must not create criteria for banking hubs that do not necessarily solve the problem; we are trying to solve access to cash and banking services for all our constituents, irrespective of where they live.

More than 1,300 residents have already signed a petition in support of our campaign in Abbots Langley for a banking hub. I continue to push hard for that to be achieved, as that area in my community would greatly benefit from a banking hub as an obvious solution to the current lack of access those residents have.

Returning to the importance of access to cash, it is essential that the key service provided by banks continues to be available to people. I appreciate that we are moving increasingly towards a cashless society. It is rare now to find a shop that does not accept card payments, or indeed accepts cash at all. The idea of carrying emergency cash may, for many of us, seem less common. As someone with a background in small business, I understand the importance of cash for small and medium-sized businesses. Although ATMs make cash available to the wider population, it is not the same as the face-to-face interaction that a banking hub provides. I am glad that the major banks have recently signed a five-year access to cash deal with the Post Office to allow free withdrawals and deposit of cash, but that is a small step compared with the need for the services that banking hubs provide.

Of small businesses, 28% use cash at least weekly, and with more than 5,500 small businesses in South West Hertfordshire, banking facilities are not a service they can go without. Ahead of the debate, I thought it was important to speak to local businesses in my area. I contacted businesses across Abbots Langley, Rickmansworth and Kings Langley for their views on banking services and the role that cash plays in their everyday business. Many of the businesses I engaged with supported banking hubs, because they regularly need to deposit cash. Business owners in Abbots Langley told me that because they have no access to banking services, they often have to travel long distances to Watford to deposit large amounts of cash, which is time-consuming and potentially unsafe. That would be solved if Abbots Langley had a banking hub.

Small business owners are not the only group affected by the digital exclusion that comes with the loss of high street banks. Nearly a third of people over the age of 65 across the UK say that they feel uncomfortable using online banking, particularly for large or delicate transactions. Some 19% of people in my constituency are over 65. Having a banking hub allows the elderly and vulnerable to feel more comfortable, because they can access and deal with their finances in person. It is great that people often feel that they can trust their postmaster. Again, this may be some of the only social interaction that many people have, and it benefits their mental health and wellbeing.

It is not just the elderly who are affected by the move towards a cashless society. I have long advocated ensuring that the infrastructure in South West Hertfordshire, including essential services such as banking, is accessible for everyone. Those with a disability or impairment are also being impacted by the move away from high street banks. In a recent survey of a group of 2,700 people who had a disability or impairment, more than half said they had been negatively impacted by bank closures. They struggle with security features, authentication checks and speaking to their bank over the phone. They are simply left with no other alternative, and should not be forced to travel to other towns, often on unreliable, infrequent public transport, simply to access their money.

More than 1 million people in the UK rely wholly on cash, and 8 million adults report that they would struggle in a completely cashless society. For the elderly and the vulnerable, the opening of local banking hubs reduces the risk of their becoming victims of financial abuse and allows them to remain independent. As I have said, post offices and the postmasters who run them are often more than just a post service. They see their regulars frequently, and will notice if someone has not been seen or does not look well. They are not healthcare professionals, but they are another set of eyes and ears that can tell how customers are doing.

The process of opening a banking hub is currently undertaken by Cash Access UK, Link and supporting banks, and I look forward to meeting with Link shortly to begin discussions about getting a banking hub in Abbots Langley. I previously discussed the process with other colleagues, including my hon. Friend the Member for Broxbourne (Lewis Cocking), who expressed concerns about the parameters that are used to determine whether an area qualifies for a banking hub.