My Lords, officials at the Department for Business, Energy and Industrial Strategy use a range of data sources, including the ONS, Statista and IBISWorld, to assess the impact of the current economic situation on hospitality businesses. In addition, Ministers and officials work closely with hospitality businesses and the main trade bodies, including UKHospitality, the British Beer and Pub Association, and the British Institute of Innkeeping, which provide us with valuable data on levels of trading and economic performance.
My Lords, the cost of living crisis is causing hardship not only to individuals and families but to the businesses that employ millions of people in the UK hospitality sector. Many of those businesses are on the brink of closure, not least due to food inflation and spiralling energy costs. Will the Government reverse their decision to reduce support for the sector in relation to energy bills and retain a permanent lower rate of 12.5% VAT? Will the Government also commit to updating their hospitality strategy, published in 2021, to ensure that the sector can meet the challenges that it now faces?
The noble Baroness makes a good point. We will certainly keep the hospitality strategy under review. It is worth recognising that we have offered considerable support to the sector, as we have to all businesses. I am afraid that we cannot continue to provide such levels of support. Nevertheless, support is available through business rates relief and other policies, and we continue to liaise closely with the sector.
My Lords, would it not be helpful to make an assessment of the impact on the livelihood of those who work in the hospitality sector of the damage caused by the strikes on the railways?
My noble friend makes an important point. The sector estimates that the railway strikes have cost it over £1 billion in lost revenue during the strike period, so they do have a significant impact.
My Lords, it is a mystery to most people why, if oil and gas prices are coming down, energy bills are still high. For hospitality and arts venues, these bills have increased massively in the last year. Is the Minister aware that, according to the Night Time Industries Association, for most of 2022 one venue closed every two days? The Government should, and can, do much more to help, particularly considering that some energy companies are making huge profits.
That depends on what the noble Earl defines as an energy company. Many of the energy retailers are making very little money—in fact, they are losing money. Nevertheless, the noble Earl makes an important point. We want to make sure that there is no price gouging going on. We are in regular contact with Ofgem officials, and I have met with them. One of my ministerial colleagues has met with the energy supply companies to make sure that they are also doing all they can to support these vulnerable businesses.
My Lords, does the Minister appreciate that one of the significant problems facing the hospitality industry has been the shortage of labour, a direct result of the Brexit of which he was such an enthusiastic supporter? What will the Government do to enable the hospitality industry to get suitable labour for the next season?
I am not sure that I would equate the two issues, but I am happy to debate this with the noble Lord some other time. There are some labour shortages in the hospitality sector, as there are in others. We want to get the message across that industry needs to invest in workers from this country, rather than relying just on immigration all the time.
My Lords, following up on that last question, would the Minister like to decide in the short term where he will get his workers from? If the industry contracts, there will be nowhere for them to go and we will all lose. Could he comment on that?
It is not necessarily the case that the industry is contracting: this year, revenues were ahead of where they were before the pandemic. There are some businesses closing and others are opening, and employment is up since before the pandemic.
My Lords, a few noble Lords have referred to the impact of Brexit. Can my noble friend the Minister assure us that, when it comes to future immigration policy, whether for the hospitality sector or others, we look not only to white Europe but to non-white, non-Europe, to make sure that we no longer have a racist immigration policy?
My Lords, I declare an interest, in that many thousands of workers in the hospitality industry are members of my union, Unite. As the Minister knows, new figures show that one in seven jobs in this sector are now completely unfilled. It is impeding businesses dramatically, to the tune of 16% of their revenues, and reducing productivity and potential profits—profits are falling by the wayside. Does the Minister therefore support the industry’s call to lower visa requirements, as other noble Lords have mentioned before, to help address the chronic staff shortages, reduce VAT to 10% for 12 months, as has been mentioned, and continue the energy support for at least the next 12 months.
I know that the Home Office keeps all visa policies under review. If the noble Lord will forgive me, I will leave the setting of VAT to the Chancellor, but I am sure he has heard the call that the noble Lord has made.