Hospitality Sector: Fiscal Support

Steve Double Excerpts

Wednesday 31st January 2024 Westminster Hall

[Steve Double (St Austell and Newquay) (Con)]

It is an honour to serve under your chairmanship, Ms Bardell. I am delighted to take part in this debate, and I very much congratulate the hon. Member for Stirling (Alyn Smith) on securing it. I am delighted to see the Minister in his place to respond; along with my hon. Friend the Member for Sutton and Cheam (Paul Scully), there have never been two greater champions in Government for the tourism and hospitality sector. I am delighted that the Minister is now in the Treasury, because I am sure that he can be a champion there for this very important sector—not putting any pressure on him at all!

I represent a constituency that is one of the most dependent on the tourism and hospitality sector in the whole country. For example, it is estimated that around 60% of all jobs in the town of Newquay rely on it, and that one in three households across Cornwall derive at least some of their income from hospitality throughout the year. The subject is therefore so very important to us in St Austell and Newquay. We have some amazing hospitality businesses, from St Austell Brewery—which was established in 1851 and is, I believe, the biggest family-owned brewery in the country; it produces amazing beers, like Tribute and Proper Job, has been around for nearly 170 years, and employs hundreds of people in my constituency and well over 1,500 people in the wider region—right through to an American diner in St Austell called Rocky’s, which opened last week. I was delighted to be there on the opening night, and I wish the people there well in starting up a hospitality business in these very challenging times.

We have amazing hotels like The Headland in Newquay, with which the Minister is familiar, the Watergate Bay Hotel in Watergate Bay, and Scarlet in Mawgan Porth. On the south coast, we have the Carlyon Bay Hotel, which Mr Speaker very much enjoys, and Fowey Hall in Fowey, in which I know many hon. Members have stayed. They all play a vital part in the economy and the communities that I have the pleasure of representing.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the hon. Member for giving way as he extends his conducted tour around his constituency; I congratulate him on so doing. Does he agree that we all, Government especially, need to ensure that the magnificence of areas like his, and like mine on the north coast of Northern Ireland, are promoted nationally and internationally, in order to maximise the benefits for all our constituents?

[Steve Double]

I absolutely agree. We need to get international tourists who come to this country out of London. Too many never venture past London. I know that the Department for Culture, Media and Sport has worked on that, and we have certainly seen some benefits of more international visitors coming to Cornwall and enjoying all that we have to offer.

I will never forget the moment, shortly after the lockdown was announced, that I read a report that said that my constituency of Newquay was predicted to be the hardest hit by the lockdown. Those days were deeply worrying for me. I had business owner after business owner on the phone asking, “What am I going to do? This will literally devastate my business.”

There was a sense of relief a few days later when the then Chancellor—the now Prime Minister—announced the package of support that would be put in place, particularly the furlough scheme but also the targeted support for the hospitality sector. My phone lit up with the people who had rung me in the preceding days; they were so relieved that the Government were stepping in. That demonstrates that this Government understand the importance of the hospitality sector. They provided more support to the hospitality sector than to any other part of our economy during the pandemic, and I know hundreds of businesses in my constituency who are so grateful for it. It is sometimes very easy to forget that support, but it shows the importance that the Government place on the sector.

However, as we have heard, many of those businesses are finding times equally challenging right now. The challenges are different; they are mainly to do with rising costs rather than with demand being taken away. Those could be energy costs, costs in the supply chain or rising wages. I absolutely support the increase in the national living wage, but we need to appreciate that there is pressure on businesses to meet that increased wage. There is therefore a need for the Government to look at what further support they can provide to this sector, not just to get it through the current challenges, but for the long term.

I would ask two things in closing—both of which have already been said, but I will add my voice. There is a case to be made for cutting VAT. I would go for a 10% cut in the VAT rate for hospitality. We have shown that that works. I know there were concerns about how much the cut that was put in place during the pandemic was passed on; I think about 70% of businesses passed on at least some of that cut, but we need to work with the sector to ensure that if VAT is cut, all of the cut is passed on to the customer.

Business rates also need to be looked at. The rise of 6.7% is out of step. I urge the Government to look to the October rate for inflation when increasing business rates. We need more fundamental reform of business rates for the hospitality sector in order to reduce the burden of that tax.

[Robin Millar (Aberconwy) (Con)]

I recognise much of what my hon. Friend says about his constituency in the description of my constituency as the largest resort area of Wales. The difference in Wales, of course, is that the Welsh Government have not passed on the full business rates cut that has been enjoyed in England. Does my hon. Friend agree that that would be the first and most sensible measure that could be put in place to help tourism and hospitality businesses in Wales?

[Steve Double]

My hon. Friend makes a sensible and important point; I agree.

I hope the Minister senses the cross-party support for this important sector and takes away a clear message to the Treasury to look at what more can be done to support the sector in the upcoming Budget.

--- Later in debate ---

[Nigel Huddleston]

I cannot comment on any further changes, but there has been some flexibility with covid loans, as we have announced. This is important. Of course, we want those covid loans to be paid back, but that needs to be done over a period of time that is sustainable for businesses. This is in the context of the overall support, including the comments that I made about business rates relief and other things for the retail, hospitality and leisure sector. We are aware that the sector was hit so hard by the pandemic and is still in the process of recovering—it is recovering remarkably strongly, but it is not out of the danger zone yet.

[Steve Double]

Will the Minister give way?

[Hannah Bardell (in the Chair)]

Order. Before the Minister gives way, I just say that I gave him extra flexibility so that he could answer everybody’s queries and questions, but I want to give an opportunity to respond to the sponsoring Member, the hon. Member for Stirling (Alyn Smith). So please keep the intervention short.

[Steve Double]

On the housing issue, one thing that the Treasury could do is level the tax playing field on the tax breaks between short-term holiday lets and residential properties. That would make a significant difference and would really help. Perhaps the Minister will take that message back.

[Nigel Huddleston]

I thank my hon. Friend and others for their input today. I will briefly comment on a couple of more items before I close, Ms Bardell. The hon. Member for Bath (Wera Hobhouse), which is another beautiful constituency that I visit frequently, raised a range of issues, including the importance of the environment in the tourism eco-system and environmentally sensitive tourism. I think we will respectfully disagree on the efforts being made by the Government on decarbonising and so on. I think we have a very proud record. I recognise that there is a debate in this area, but her broader points about the contribution of tourism to the environment and the importance of sustainability are important.

The hon. Member for Ochil and South Perthshire (John Nicolson) raised a range of issues, and I will present to him the challenge that I also presented to my opposite number, the hon. Member for Ealing North. The hon. Member for Ochil and South Perthshire made a comment about tax cuts just for the rich and wealthy, but that is so far from reality that I will have to respectfully disagree with him. If he does not believe that we are giving tax cuts to everybody—as I said, the national insurance cuts that we made were for 27 million people— I will present him with the same challenge: let us look at his pay packet for this month and see whether the contribution is lower than December’s. If he does not believe that it is lower, with respect, why does he not give that money to charity or back to the Government? It is important that we recognise that the national insurance cuts are meaningful for 27 million people, including many people on low incomes. That is far from the characterisation of saying that these are tax cuts for the wealthy. We have a laser focus on making sure that the low-paid benefit from such tax cuts.