Hospitality Sector

John Milne Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The economic landscape is extremely difficult for many businesses and industries, and hospitality is one of the sectors facing the most acute challenges. Pubs, restaurants, cafés and hotels are dealing with huge pressures—unfair taxes, soaring energy bills, skills shortages, and a broken business rates system. The Labour Government have had more than a year to address these issues, but instead of throwing businesses a lifeline, their policies have only made it harder for businesses to keep their head above water. Changes to employers’ national insurance, the reduction in business rates relief and the absence of any meaningful action to bring down commercial energy prices are all factors contributing to job losses, business closures and stagnant economic growth.

Although this Government’s decisions have made things worse, business sentiment certainly was not rosy during the last Parliament. Years of dire economic mismanagement by the previous Government forced business owners to make cuts, hike prices and work longer hours. Even though we Liberal Democrats are supportive of today’s motion, we feel obliged to point out that the Conservative Government’s chaotic approach caused so many of these problems, including soaring energy costs, a staffing crisis, and the vast increase in regulation and red tape brought about by their dismal Brexit negotiations.

According to UKHospitality, the measures in last year’s autumn Budget delivered a hit to the sector worth a cumulative extra £3.4 billion annually. Meanwhile, data from the Office for National Statistics shows that the hospitality sector has shed nearly 70,000 jobs since last October. That works out as an astounding 3.2% of all jobs in the sector, and it is 266% higher than the number of jobs lost in the overall economy. Those figures lay bare the slow dismantling of the hospitality sector as a direct result of this Government’s policies. A recent survey conducted by UKHospitality found that since the autumn Budget, a third of hospitality businesses are now operating at a loss, with 60% cutting jobs, 75% having increased prices, and two thirds reducing staff hours. These cuts are a last-ditch attempt by businesses just to stay afloat as they cry out for support. Small businesses are the beating heart of our economy.

[John Milne (Horsham) (LD)]

This morning I received a letter from Kelly Mariner, the manager of an independent coffee shop in my constituency of Horsham. She said:

“Since the last Budget I have been unable to hire new staff and cannot grow my business. I am spending every day doing the job I love in front of the customers, but it means I can’t develop or follow up new ideas. Paperwork is a juggling act and I spend very little time with my family.”

She asked to meet me. Does my hon. Friend agree that meeting those in the hospitality industry is exactly what the Chancellor needs to do before digging her budgetary hole any deeper?

[Sarah Olney]

My hon. Friend gives a striking example of exactly what I was saying about the pressures faced by the hospitality sector. He is absolutely right that the Chancellor needs to hear these calls from the hospitality sector as she puts together her Budget, which we now expect at the end of November.

Small businesses are the beating heart of our economy. They are at the centre of our local communities, and they create the jobs we all rely on. We are glad that raising the employment allowance will shield the very smallest employers, but thousands of local businesses, including many in the hospitality sector, will still feel the damaging impact of the national insurance increase. My Liberal Democrat colleagues and I have voted against the Government’s misguided jobs tax at every opportunity, and I once again urge them to scrap these measures, but I also press the Minister to at least spare our treasured pubs, restaurants, café and hotels by exempting the hospitality sector from this tax rise. Whether they were aware of it or not, the Government’s decision to raise the rate of national insurance contributions while reducing the salary threshold at which it is levied has significantly increased the cost of employing part-time workers, delivering a disproportionately large blow to the hospitality sector.