My Lords, hospitality businesses are fundamental to the life of our communities. As such, we are introducing permanently lower business rates for eligible retail, hospitality and leisure businesses, and a £4.3 billion support package over three years to shield rate payers from bill increases following the revaluation. In addition, the Chancellor announced earlier today that every pub and live music venue will receive 50% off their new business rates on top of this support, and bills will be frozen for two years. Moving forward, we will review the valuation methodology for pubs and hotels as well.
My Lords, the Government’s announcements are welcome, as far as they go, and will provide some short-term relief to three out of four pubs, but in three years’ time, when the discounts and the freeze end, bills will still rise by 76%. Also, there was nothing for hotels beyond a review of valuation methodology, despite the fact that hotels’ rates will rise by 115% over three years. Why do the Government not just apply the 20p discount that is allowed in legislation across the entire hospitality sector, instead of the current 5p? That proposal has the virtue of being much simpler and cleaner than endless reviews and freezes. Why is this relief restricted to three years, and when will the review of hotel rates be delivered?
Business rate reform has been on the agenda for the last number of Parliaments and this Government have taken it on. Since I came into government six months ago, I have been proud that our overall objectives have been about stability in our economy, bringing down inflation—it is on target for next year—and making sure that consumers have more money that they can spend in the hospitality industry. Alongside that, the review of overall business rates and the commitment of £4.3 billion mean that over a third of businesses will pay no business rates, over half of ratepayers will see no increases and 23% will see their bills going down. This is funded by targeting those with higher rateable values. Overall, while the main thing is bringing stability to the economy and bringing inflation down to make sure that consumers are spending, reform of revaluation is increasingly important as well.
My Lords, while, of course, there is a need for holistic reform of business rates—the Liberal Democrats have long proposed a commercial land- owner levy—in the short term, just as the noble Lord, Lord Sharpe, suggested, reducing the retail, hospitality and leisure multiplier by 20p, as opposed to the Government’s 5p, would make a big difference. The whole retail and high street sector has been hit by this—not just pubs or hospitality—so does the Minister recognise that the current proposals, while welcome, are too small and narrow to help our high streets?
I clearly acknowledge that there are challenges in the economy that are not of the making of the last 18 months alone. Changing consumer behaviours post Covid are a challenge for our overall economy. However, to restate what I said before, we need to get the economy back on track overall and ensure that we have fiscal responsibility. This package alone will cost us £4.3 billion. The additional announcements today on pubs and live music venues take that even further. On average, that relief will be more than £1,600 per pub. We have to do all that while balancing the overall needs of the economy with fiscal responsibility, which the Government set out as major proposals.
My Lords, in my maiden speech last week, I spoke about the important role that local government can and should play in creating and curating place. With that in mind, does my noble friend the Minister agree that local authorities can be good and effective champions for the hospitality and retail sectors in their areas?
I welcome the noble Lord to the Chamber and thank him for his question. The national government policy that has been announced since we came in is critical, and local government is an even more critical part of leadership in our communities. Not only do local authorities offer the vision and ability to enact what is relevant to each community but they are close enough to the hospitality sector and individual high streets to know what is needed. I thank the noble Lord for his contributions so far and look forward to working with him.
My Lords, hospitality businesses across the south-west of England, particularly those in our coastal and rural areas beloved of tourists, suffer from an inability to attract staff in specialist roles. A major cause of this is a chronic lack of suitable housing, particularly due to planning restrictions and the popularity of second homes. What steps are His Majesty’s Government taking to ensure that housing is available for those seeking a career in hospitality in our rural and coastal communities? I note my interest as the owner of a hospitality business in Devon.
I believe the original Question was about helping the hospitality sector. The comment about housing is outside the purview of my domain of expertise as Minister for Investment. However, the Government are investing in young people’s futures holistically. We have seen a sharp decline in apprenticeships. We are trying to implement a new foundation apprenticeship to give young people a route into critical sectors. While I acknowledge that housing is a critical part of that, making the economy grow more holistically is a way that we can ensure that the hospitality sector works in its own right.