Hospitality Industry: Government Support

Stephen Doughty Excerpts

Monday 11th January 2021 Westminster Hall

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Mr Stringer. I second the comments of my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on virtual participation in these proceedings. I hope that can come sooner rather than later. I also second many of her excellent comments in opening this crucial debate. It was disappointing to come to this debate after the Chancellor’s statement earlier—the first statement he has made in Parliament in 41 days. He had very little new to say. I think many of the hospitality businesses in Cardiff South and Penarth and in many of our constituencies would have hoped for something different, given the new and very difficult but necessary restrictions that they face.

I also second many of the points made by colleagues across the House about the support that will be required to ensure that businesses can come out on the other side of this when restrictions can eventually be lifted. I have had a huge number of emails from businesses in my constituency of Cardiff South and Penarth and from concerned constituents who point out that turnover across the sector is down by 40%, and that 41% of businesses might fail in 2021, yet one in six new jobs in the economy were created in this sector. I know that from my own constituency.

Even during the pandemic, businesses were able to set up, particularly during the summer period, and get going, but have found themselves in new difficulties. We have to remember that the sector is much wider than it appears on the face of it. It is not just the pubs, restaurants and cafés; it is also the food supply businesses, the breweries and the laundries—I have some major laundries in my constituency. It is the wider economy and all the jobs that come with it.

I commend the approach taken by the Welsh Government. A new tranche of the economic resilience fund was announced in December—£340 million for hospitality, tourism and leisure—on top of the £1 billion they announced to support businesses through rates relief and other measures, as well as the job retention scheme and the self-employment income support scheme. The new measures required new support, and on 18 December, they were announced with £110 million of support.

On the situation facing pubs in particular—my hon. Friend the Member for Warrington North (Charlotte Nichols) raised many of these issues—many local independent pubs in my constituency have contacted me in significant difficulties, but primarily I want to raise the case of Brains Brewery, one of the signature brands of Wales. Tragically, it has found itself in significant difficulties.

Brains has its headquarters in my constituency and has been brewing there for many decades. It is one of the things at the very heart and soul of Welsh culture or, certainly, of Cardiff culture, as anybody who knows groups like the Hennessys will know—they refer to the importance of Brains Dark and many other fantastic brews. Now, while more than 1,000 jobs have been able to be saved through a deal with Marston’s, the tragic possibility is that Brains beer will no longer be brewed in Cardiff.

I have been speaking with the Welsh Government, Cardiff Council and others, and I urge the Minister to consider what support can be given to breweries in particular, especially those with particular cultural and historical heritage in parts of the UK. I hope that he can address some of those concerns in his remarks.

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[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Thank you, Mr Stringer, I will do. It is a pleasure to serve under your chairmanship.

I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing the debate and representing the petitioners so well. They are understandably crying out for help to get across the line, after such a difficult period. Hospitality has undoubtedly been one of the hardest pressed, if not the hardest pressed, sectors over the pandemic. I thank everybody who has contributed to the debate for the way in which they have put the case for their constituents.

Since taking on responsibility for food and beverage hospitality businesses in March last year and establishing a dedicated sponsorship team within the Department for Business, Energy and Industrial Strategy, we have worked extremely closely with representatives from across the sector, so there has always been development. I will come back to the question of a dedicated Minister in a second, but essentially, this was split across a number of Departments and we now have a dedicated hospitality team that is working really hard.

I also put on record my gratitude to the sector itself for how its representatives have engaged with me and my officials throughout the pandemic. It is important to recognise that the hospitality sector is not just pubs and restaurants: cafés, the wedding sector, nightclubs and all the associated businesses that we have heard so much about today, including specialist suppliers, are also going through this. I thank them in particular for how they engaged with the safer workplace guidance to allow essential businesses to stay open, but also to allow these businesses to reopen at various points. Understandably, as we have discussed, the fact of the matter is that there has been opening and closing depending on the tier system, and that has been a source of frustration for everybody, especially—as my right hon. Friend the Member for New Forest East (Dr Lewis) says—those that have had to pour away beer and throw away food at various points during this period.

We continue to work together with the sector across Government to make sure that we can strike the right balance between the covid-19 restrictions and the corresponding business support measures. As we have heard, we responded with an unprecedented package of support worth a staggering £280 billion, which included the grants, the furlough scheme, the various loan schemes, the business rates holiday, VAT deferrals, and of course the eat out to help out scheme. On top of that, we released additional funding worth £4.6 billion to help businesses through the current lockdown, which we estimate will help 600,000 hospitality businesses. We have also taken action to protect businesses by placing restrictions on landlords using commercial rents arrears recovery to enforce unpaid rents on commercial leases. Importantly, we have kept all the support measures under review to ensure that as far as possible, they have kept pace with the changing covid-19 situation and the need to flex restrictions accordingly.

[Stephen Doughty]

Will the Minister give way?

[Paul Scully]

I will not give way, just so that I do not run out of time, but I will come back to the hon. Gentleman in a second.

Like those who have taken the time to sign a petition, and those right hon. and hon. Members who have taken part in today’s debate, I recognise the importance of the hospitality sector, not just to local areas but to whole communities and to the country as a whole. We have heard that the sector employs around 3.5 million people overall, and in normal circumstances generates revenues of around £63 billion a year. It is strategically important to the UK, as well, traditionally being the first sector to recover following an economic downturn and acting as a catalyst for wider economic recovery and regeneration.

Most importantly, the sector lies at the heart of communities, providing jobs and places to enjoy companionship and supporting mental health and wellbeing, social cohesion and cultural integration. It is important that when we talk about culture—about meeting people—we remember that that is what hospitality is there to do, and it is really sad that the restrictions and lockdown itself are there to stop people meeting people. As we have heard, though, that is not to say that hospitality in itself is the vector for transmission. It is really important that we do not scapegoat the hospitality sector, which has done so much—it has spent a lot of money and put in a lot of effort—to make its venues covid-secure.

Turning to the question of establishing a Minister for hospitality, responsibility is currently split between BEIS and the Department for Digital, Culture, Media and Sport: BEIS is responsible for the food and beverage industries, and DCMS is responsible for accommodation, primarily hotels, as part of its tourism remit. There is clearly some overlap between these important industries, and I work closely with the Minister for Sport, Tourism and Heritage at DCMS, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), to ensure that the interests of this sector as a whole are fully represented across Government.

The close collaboration that we have means that the policy levers in both DCMS and BEIS can be employed effectively to the benefit of the sector. Clearly, it is not within my gift to create a new ministerial post—that power rests solely with the Prime Minister—but I can assure hon. Members that the two of us are doing all we can within Government to understand and represent the interests of the sector. Whether or not we have a dedicated Minister for hospitality, we need to ensure that the sector is in the best possible place to bounce back from covid-19, so that it can play a leading role in the UK’s economic and social recovery.

We know that the hospitality sector has often shown great resilience and innovation in adapting; such adaptation is not a new phenomenon. We saw that hospitality was one of the first sectors to recover after the 2007 financial crisis, which helped drive the UK’s recovery more generally. In order to achieve the same level of recovery that we saw following that crisis, we are committed to maintaining support to the sector until the vaccines are rolled out and businesses can open without restrictions. However, we also need to think about and plan for the longer-term recovery.

The UK has a world-leading net zero target. I want to see the creativity that helps define the hospitality sector put to good use in helping to tackle climate change, by developing and utilising new technologies and processes to minimise emissions and, importantly, waste. Although this is a challenging time for the sector, it is essential that, as we bounce back, we work with hospitality businesses to build back their industry so that it is stronger and greener.

I thank the hon. Member for Brighton, Pavilion (Caroline Lucas), who was unable to attend the debate today but sent me a statement from hospitality businesses in her constituency, supporting the creation of the ministerial position and emphasising the important role that the sector will need to play in our economic recovery and growth. I hope that I have addressed both those points.

We have had a very interesting debate, starting with the hon. Member for Strangford (Jim Shannon). One of the regular calls that I have with the industry includes Colin Neill from Hospitality Ulster. We also heard from the hon. Member for North Antrim (Ian Paisley), who talked about Van Morrison. Actually, a Van Morrison gig was one of the last gigs that I went to at the O2, to raise money for the Royal Marsden Hospital. The O2 itself is now one of the nightingale hospitals, and one of the people who set it up was the chief nurse at the Marsden—everything comes around in a circular fashion, which shows the unusual times we are in.

With regard to the coffee culture that my hon. Friend the Member for Winchester (Steve Brine) talked about, we should not forget that takeaway coffees also play a part for shift workers, who need such extra support, so not everything that is seen as non- essential is non-essential to certain people.

There is no way we can have a one-size-fits-all policy. Certainly what I have learnt about the hospitality sector over the past nine or 10 months is that a lot of work is being done behind the scenes, whether with me or with my hon. Friend the Minister for Sport, or through lobbying by Colin Neill, Kate Nicholls or Emma McClarkin, or through lobbying from the chief executives of the larger pub businesses, the independent pubs, the restaurant groups and all those sorts of businesses. That means we can address issues such as the 10 pm curfew, which was a blunt instrument, as has been outlined. It clearly stopped restaurants having second sittings, but it also stopped pubs selling a lot of alcohol at that time—a lot of their profit is created at that time but it was also pushing people together. I am also the Minister for London and I saw at that time a 40% increase in the use of the tube between 10 pm and 10.15 pm. The curfew was clearly pushing people together, doing the opposite of what we wanted. It was therefore right to make the case against it and have it reversed.