Covid-19: Hospitality Industry

Mick Whitley Excerpts

Wednesday 24th March 2021 Commons Chamber

[Mick Whitley (Birkenhead) (Lab) [V]]

I draw the attention of the House to my entry in the Register of Members’ Financial Interests.

At long last, we find ourselves in the final stretch of the long war with covid-19. Thanks to the tireless efforts of NHS staff and volunteers, vaccination rates are soaring, and many of us are now eagerly looking forward to the gradual relaxation of lockdown measures and the reopening of shops, cafés, restaurants and pubs. However, for much of the hospitality industry, the next few months will be fraught with uncertainty and worry. Independent businesses up and down our high streets are in the midst of an intense cash crisis. Grants and loans have been exhausted; proprietors are being forced to defer bills and mortgage payments; over half of businesses in the accommodation and food services industry have just three months’ cash reserves; and many small businesses find themselves burdened with unmanageable levels of debt that could well sink our economic recovery. Once again, this Government are failing to do what is needed to protect the hospitality industry.

Time and again I have called in the House for a comprehensive package of support that gives owners and workers much needed security and peace of mind in the challenging months ahead. Instead, all this Government have delivered are piecemeal measures that have left much of the hospitality industry barely able to keep its head above water. Businesses today have access to lower levels of financial support than they did at the start of the pandemic, despite finding themselves in far more severe financial trouble. The Government were far too late in extending the furlough scheme and business rate relief—a delay that needlessly cost jobs. The March Budget contained no measures whatsoever to assist small businesses with much-needed debt restructuring.

The impact on workers has been devastating. Prior to the pandemic, more than 3 million people—8% of the entire UK workforce—worked in hospitality. Over the last year, a wave of redundancies has swept the sector, with the youngest and lowest-paid workers bearing the brunt. Our economic recovery will be built on the backs of small businesses and our local high streets. We now need decisive action that gives independent businesses confidence in the future, and safeguards people’s livelihoods.

That is why Labour is calling for an ambitious high streets fightback fund that will give much-needed assistance to those businesses that have been most devastated by the pandemic. Labour’s plans will stop small to medium-sized enterprises being swallowed by a black hole of debt, by allowing businesses to start repaying Government loans only when they begin to grow again. Businesses must also be allowed to convert debts into employee ownership trusts, giving workers a real stake in the future of their workplaces. We must also create the conditions that allow local shops to compete with online retailers on a more equal footing, and give local authorities the powers they need to fill empty units as a means of revitalising our neglected high streets. Finally, we need action to tackle the scourge of low pay and insecure work that has plagued the hospitality industry for far too long. That means ensuring that every employee is paid at least the minimum wage and has a guaranteed number of hours each week.