Hospitality Sector

Llinos Medi Excerpts

Tuesday 1st July 2025 Westminster Hall

[Llinos Medi (Ynys Môn) (PC)]

I congratulate the hon. Member for Kingswinford and South Staffordshire (Mike Wood) on securing this debate. I declare that I am chair of the all-party parliamentary group for hospitality, events, major food and drink businesses in Wales, and a member of the all-party parliamentary group for hospitality and tourism.

A report from the Wales Tourism Alliance found that tourism and hospitality contribute £3.8 billion to the Welsh economy and employ more than 11% of people in Wales, rising to up to 20% in areas such as my constituency of Ynys Môn, where alternative employment is scarce. Recent decisions taken by this Government have hit the sector hard. The increase in national insurance has pushed up costs for local hospitality businesses in my constituency. Will the Government now look at supporting small hospitality businesses that can only afford to employ people on lower wages, by reducing the rate on earnings between £5,000 and £9,100?

Another cost to the hospitality sector has come from the changes to inheritance tax. Family-run caravan parks such as Kingsbridge, in Beaumaris on Ynys Môn, have expressed to me their concerns that these changes will have a dramatic impact on their viability. I call on the Government to listen and change course, to ensure that local businesses are protected from the damaging effects of the changes.

The current business rates system is also unfair and needs to be reviewed. At present, local hospitality businesses pay far more than major chains on the outskirts of towns. The Welsh Government recently announced a review of the business rates system, but hospitality businesses were left out. I call on the Welsh Government to go further and include this crucial sector in the review. Businesses such as pubs, restaurants and hotels have not only an economic, but a social value. They are places that unite communities and breathe life into our towns and villages. That should be reflected in the business rates system by rebalancing it in a fair way to support local bricks and mortar businesses over major retailers.

The last five years have been incredibly difficult for hospitality businesses. Food and drink inflation has been consistently higher than the main rate. The peak of food inflation was 19.2% in October 2022, while the peak of overall inflation was 11.1% in the same month. Large retailers have been much better placed to withstand these pressures than smaller businesses. For example, during covid-19, when pubs had to close their doors to keep communities safe, large retailers benefited from increased alcohol sales.

North Wales also pays some of the highest energy bills in the United Kingdom. Businesses in north Wales pay £161,000 a year for electricity—8% higher than the UK average and 13% higher than those in London, at £142,000 a year. This is because third-party charges on Welsh energy bills are higher, including grid costs. The Government’s industrial strategy said nothing about ending that disparity. We need action to address this wholly unfair situation, to ensure that Welsh businesses pay the same amount for their energy as businesses elsewhere in the UK.

Support for hospitality, which is a key sector on Ynys Môn, is vital if we want our communities to remain vibrant and work opportunities to be available to local people. I urge the Government to listen to the calls to back the industry with the support it needs to thrive.