Hospitality Sector: Fiscal Support

Debate between Steve Double and Gregory Campbell

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.