Pub and Hospitality Sector

Debate between Richard Holden and Peter Bedford

Tuesday 22nd October 2024 Westminster Hall

[Mr Bedford]

My hon. Friend is absolutely right: we should do all we can to support the industry as it recovers from the pandemic, and I hope the Chancellor takes on board his sensible suggestion.

For the hospitality sector, the most concerning part of the Employment Rights Bill, which had its Second Reading yesterday, relates to so-called equality laws, which are being updated to make employers liable for staff being “offended” by third parties. That would in effect turn hospitality managers into banter cops, who will feel duty-bound to step in every time someone makes an off-colour remark or joke. How on earth can we be entering a world in which someone can be deplatformed in their local pub? It is absolute madness.

I move on to another piece of Orwellian legislation. The ban on smoking in beer gardens and outdoor spaces is frankly ludicrous. The nanny state is causing outright economic harm to the industry, and I implore the Government to rethink their proposals.

Finally, I shall mention gambling regulation. There have been reports that taxes on the gambling sector will rise in line with the recommendations of the Institute for Public Policy Research commission on health and prosperity. The increase, worth £46 million, will wipe out the profit of the bingo industry and is likely to cost 8,000 jobs across our local communities. The bingo industry has made it clear that if speculation around the Budget comes to fruition, it will be even more damaging than covid and the energy crisis.

What could we do instead? We could look at cutting beer duty or bringing in 20% draught relief. The UK has one of the highest alcohol duties in Europe. Duty on a pint of 5% beer is 54p, compared with 5p in Germany. A pint of beer is four or five times more expensive in a pub than purchased in a supermarket. The brewery industry is the most taxed sector in the UK, at 40% of its turnover. That is a regressive tax and hits people on the lowest incomes the hardest.

[Mr Richard Holden (Basildon and Billericay) (Con)]

My hon. Friend is making a fantastic speech, covering all aspects of the hospitality sector. An extra benefit of draught beer relief is that 97% of the input into draught beer is made in the UK. That has a big knock-on effect across our agricultural sector. It is a win-win for UK farmers, the UK Exchequer and the hospitality sector. I urge him to continue to press the Government to push for greater relief in that space.

[Mr Bedford]

I thank my right hon. Friend for his intervention. More specifically to help the hospitality business, the draught relief of 20% that has been mentioned—a campaign led by my hon. Friend the Member for Mid Buckinghamshire (Greg Smith)— could see an extra 20 million pints sold a year and create 2,500 jobs, with a boost to the economy of more than £70 million.

We could protect hospitality businesses from the business rate relief changes. Pubs are taxed in a different way from most businesses—not on rateable value based on their rent, but as a calculation of their expected turnover. The ending of the retail hospitality relief would be deeply damaging for the sector, with businesses seeing a quadrupling of their business rates. I agree with the representations made by the British Beer and Pub Association that the relief should be kept until a new business rates framework is introduced.

We could also allow reform in the planning and licensing space. UKHospitality has advocated a more mainstream approach to the application of the planning and licensing framework. That would put pubs at the heart of the village and town centre. Kate Nicholls, CEO of UKHospitality, says:

“Too many hospitality businesses with ambitions to expand and grow are held back and frustrated by the current system.”

I also support the idea that there should be more flexibility for businesses to open later for special occasions, such as the women’s football World cup, to allow punters more time to enjoy the festivities. We could cut national insurance contributions for lower-paid earners and promote apprenticeships more.

The potential increase in employer national insurance contributions will have a massive impact on the UK hospitality sector. Industry experts have strongly criticised any move to make such an increase. They believe there should not be an increase—indeed, that there should be a lower level for lower-paid earners. Furthermore, the apprenticeship system is failing around the country. There needs to be a rethink in reforming the apprenticeship levy to incentivise businesses, particularly in this sector, to invest more and be more agile in how they offer apprenticeships.

In conclusion, I hope the Government take note of today’s debate and introduce measures that will enable our pub and hospitality sector to thrive and grow for the future.