I remind Members that there have been at least two sets of changes since we moved back into Westminster Hall. I will try to clarify them so that people are not confused about the procedure that is there to ensure social distancing and keep Members safe.
Members who have not arrived at the start of the debate will not be allowed to intervene or speak. Members are expected to respect the one-way system. Members should also sanitise their microphones using the cleaning materials that are provided before they use them and afterwards. Members speaking in the latter stages of the debate should use the seats in the Public Gallery if there are not enough seats in the horseshoe. Although Members are expected to stay till the end, if there simply is not enough room, it might be helpful if people leave for that purpose. Finally, Mr Speaker has asked that people wear facemasks in the main Chamber, and I think it would be sensible if Members do that in this Chamber when not speaking, to be consistent with the main Chamber.
That this House has considered e-petitions 552201 and 329985 relating to Government support for the hospitality industry.
It is a pleasure to serve under your chairmanship, Mr Stringer, in a debate on support for the UK hospitality industry and the creation of a Minister for hospitality. Before I begin my comments proper, I want to say a couple of words about participation in this debate.
On Friday, the Mayor of London declared a major incident in the capital, and it is abundantly clear that the rates of covid-19 here are incredibly worrying. In my view, that underlines why we must urgently allow virtual or hybrid proceedings in Westminster Hall debates. I know that many colleagues from across the House share the petitioners’ concerns about the future of bars, restaurants, hotels, nightclubs and other hospitality businesses, but are unable to be with us today. I assure hon. Members and the petitioners that, in conjunction with cross-party colleagues, we will continue to press the Government and the House authorities urgently to allow and enable remote participation in these important debates.
We are debating a petition with more than 200,000 signatures, started by Claire Bosi, editor of Chef & Restaurant magazine, alongside a petition on general support for the hospitality industry, created by Chrissie McLaren, which has about 45,000 signatures.
I am very grateful for an early intervention. I absolutely support the hon. Lady’s call for a hospitality Minister. I was the shadow Minister for tourism when I first came into Parliament. I wanted that job to continue when we went into government, but the size of Government restricts the number of Ministers it is possible to have, as we will no doubt hear later. In the event that we are not successful in getting a Minister for hospitality, would she support an envoy for hospitality so that we can at least have a voice for this important sector, which has been battered so hard because of covid-19, not least in my Bournemouth constituency?
The right hon. Gentleman makes an important argument. More than 200,000 petitioners are calling for a Minister for hospitality, and I am sure they will be pleased that there are alternative suggestions if the Minister does not agree to that today.
I mentioned wedding venues to the hon. Lady before the debate. Orange Tree House in Greyabbey in my constituency employs 60-odd people and generates turnover for the whole community with not just bed and breakfast but many other things. When we call upon the Minister to look after the hospitality sector, does the hon. Lady agree that it is important for all regions of the United Kingdom, including Scotland, Northern Ireland and Wales, to be part of that strategy so that we can work together and help one another?
I absolutely agree with and endorse what the hon. Gentleman has said, which adds weight to the argument for a voice at the heart of Government who can represent the interests of not only all aspects of hospitality, but all areas of the UK.
I want to put on record that my husband works in hospitality, so I live with its daily ups and downs, not to mention the huge challenges of covid-19. It is not just an interest or concern here in Parliament. The petition speaks to a concern that many hon. Members will have heard time and again from local businesses in their constituencies: that the Government lack a deep understanding of the nature of the hospitality industry and its diversity. The petitioners argue that that is why we need a Minister with responsibility for hospitality to be a voice for the sector at the heart of Government.
The hospitality industry is the third-largest UK employer. It is responsible for about 3 million jobs, generates £130 billion in activity and results in £38 billion of Government revenue through taxation. For levelling up, it is one of the few industries to reach every part of the country, and it will be crucial in our recovery from the present crisis. Unlike the arts or sport, however, it does not have a dedicated Minister.
I support the hon. Lady’s call for a stronger voice for hospitality in Government. I do not know whether she is a coffee drinker, but I am sure that she is aware in her constituency, as I am in mine, of the clusters of caffeine seekers outside kiosks and, even worse, inside waiting for a takeaway—they are a pretty common sight. Does she agree that, although those sales are not breaking any rules, they are not essential? We might need to put our coffee culture on hold for the time being.
The hon. Gentleman makes an interesting point; perhaps the Minister will comment on that in his response.
This is a timely debate, because although many businesses have taken a significant hit since March, hospitality, which thrives on social mixing and travel, has been crippled by repeated lockdowns and the risks posed by the virus. Local economies with a higher proportion of workers employed in such sectors have been disproportionately hit.
Many restaurants have pivoted to providing cook-at-home and takeaway offers with contact-free delivery or kerbside collection. In these strange times, Geordies can enjoy takeaways from all manner of venues across our city, from the Thyme Square café on Station Road, with its carry-out Sunday lunches, to the cook-at-home offerings from 21 and the Michelin-starred House of Tides on the quayside. None the less, the situation remains incredibly challenging for all. A recent UKHospitality study found that 41% of businesses in the sector thought that they would fail by mid-2021, and one in five thought that they would have enough cash flow to survive beyond February.
Even when restrictions were relaxed over the summer, most people could still go to restaurants or pubs only with the people they lived or bubbled with. The simultaneous closure of sports stadiums, cinemas, music venues and theatres has a knock-on impact. If the business of people catching up with family and friends over drinks, going on dates, or having a bite to eat after a match or film is lost, that is a huge chunk of revenue. Hospitality also lost out badly from the drop in tourist spend this winter. Other parts of the hospitality sector, such as nightclubs, have remained closed since the first lockdown in March. From the reaction to the recent debate on the night-time economy, I know that Newcastle’s iconic nightlife is sorely missed by visitors and locals alike.
It is a great pleasure to reverse roles, Mr Stringer, and to serve under your chairmanship.
Nearly 10 months ago, I asked the Chancellor in an urgent question to bring in an arrangement to reverse the usual flow of funds from businesses to Her Majesty’s Revenue and Customs, and for the nation to pay the wages of people if—and only if—their employers committed to keep employing them. At the time, I asked for that to be done for a few weeks, but 10 months later it shows how little we knew about the virus then that we should still have in place now what became the furlough scheme. I commend the Chancellor for a crucial intervention that saved millions of jobs that would otherwise have been lost. However, having come this far, and after the investment that has been made in keeping these businesses and jobs alive in the hospitality sector, we must make sure that we get through the next few weeks, so that they can continue to thrive in the future.
The furlough scheme, the business rate holiday, the hospitality grants, the discretionary grants, the VAT cut, the bounce back loans and eat out to help out have all been deployed to help hospitality businesses. However, just as the Government did not expect that this pandemic would be with us for what will soon be well over a year, neither did hospitality businesses, many of which are small, personally run and without access to resources and cash. Yet these are the pubs, cafés and restaurants that will be at the forefront of the recovery when lockdown ends—the first to give job opportunities to young people, to give business to their suppliers and to attract people back to our city centres, high streets and villages across Britain. They will also be first to pay their taxes to the Exchequer.
Last Friday, I met—virtually—several of the people who run hospitality venues in Tunbridge Wells and in Tonbridge and Malling, in a meeting arranged jointly with my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat). In a survey of 36 local hospitality businesses, they established that in the year before the pandemic they had collectively paid £4.4 million in VAT and pay-as-you-earn, and that the value of grants and furlough payments to date that have been paid to them is around £3 million. So whatever the precise figures, the point is that these businesses pay their way, and if they manage to survive they will thrive in the future and help to repay the sums that have been set aside during these last few months.
To say that the coronavirus has been a shock to the system is an understatement. What was once a health crisis spread quickly to become an economic crisis—indeed, the biggest recession on record. The multimillion-employing hospitality industry has been particularly hard hit, adding to existing, pre-covid woes over Brexit supply chains and the loss of its international workforce. Hospitality drives the health of our high streets and the viability of our suburbs and towns. A lot of these business are family run—I know: my late dad was an Indian restaurant person himself. All of these things are now facing existential threat. At the other end of the scale, the collapse of big chains such as Carluccio’s, Pizza Express and even Jamie Oliver outlets would ordinarily be big news, but these are not ordinary times, and with the worst death toll in Europe, we hear barely a whisper about them.
I never thought I would live to see the day when a Conservative Government would forcibly shut down businesses, but here we are again. A dedicated Government Minister for hospitality would give food, beverage and leisure accommodation a proper say, rather than them always being an afterthought, suffering the consequences of the latest failed experiment—the tiering system, the 10 pm curfew or whatever it is. At a time of distancing and isolation, a sector based on togetherness and sociability cannot exist on takeaway only. This sector spent a fortune on remodelling, even though social distancing slashes the number of covers available: people instituted one-way systems, enhanced cleaning, and screens to create a covid-secure environment, all seemingly now for nothing. These people are famed for hard work and resilience, but they cannot run on empty, and no one clapped when they provided meals for NHS staff or for children, outside of the Government’s initial, cruel insistence that they would not run the free school meals scheme in the holidays.
Coronageddon should not relegate hospitality to being the easiest lever to pull: first into lockdown, last out, in this zig-zag, stop-start way. These businesses need cash flow, and they need to plan for things like fresh produce orders and staffing rotas. As the MP who first spoke of a “curry crisis”, I implore the Minister: the sector is fighting for survival, and bold action is needed. Now is the time for a dedicated Minister, plus additional financial support, extending furlough and rent, rates and VAT relief, because we will all need restaurants, hotels and pubs. Some 56 pubs a week are closing at the moment; that is a matter of shame. We will all need them to get us out of the other side and build consumer confidence.
I first declare an interest, in that my husband works for a logistics company and deals directly with the hospitality sector in his role.
Looking at hospitality as a whole, we must first recognise the level of support that has been received generally within the sector throughout the covid crisis. However, three main themes are of great concern. The first is that there are many supporting and spin-off businesses that co-exist within this sector, but that seem not to have been included in all aspects of the support offered. The second is that the prolonged period in which the sector and those spin-off businesses have had to endure no customer revenue is stretching the limits to which they can wait for the sector to reopen once more, and the third is the lack of customer confidence in when the sector will be able to trade again.
A great many businesses in Loughborough are either directly part of, or related to, the hospitality sector: pubs, restaurants, cafés, bingo halls, nightclubs, bed and breakfasts, and hotels are obvious examples, and we have 290 such businesses locally, employing 3,000 people. We also have conference organisers, wedding event organisers and venues, lighting and audio technicians, event carpet and equipment suppliers, hair and beauty technicians, florists and printers, food production plants, breweries and catering equipment suppliers. Everything from hiring a tablecloth to arranging a major corporate event in Kuala Lumpur can be obtained from businesses in Loughborough. We are a very hospitable place.
Before covid, all of these businesses were not only viable, but thriving. However, economic output in this sector was down 92% in April 2020 compared with February 2020. If we want a V-shaped recovery, we must plan for one and support the businesses that will deliver it. For example, I understand that 264,000 weddings were missed last year. There will be pent-up demand, but if there are no businesses to deliver the events and services when we open up once more, that demand will not be met, and tax revenues will not materialise. There are revenues to be had: 475,000 weddings are currently scheduled for 2021, getting on for double the usual amount, creating the potential for an additional £25 billion in the sector. However, a lack of confidence that events will be allowed to go ahead means that weddings for spring and summer are already starting to be postponed and cancelled. In the meantime, finances are stretched to the limit for the whole of the hospitality sector, while businesses wait for permission to operate again.
On Friday, when I met the petition’s creator, Claire Bosi, and some of its leading supporters, including the founder and Chief executive officer of Home Grown Hotels, Robin Hutson, and chefs Tom Kerridge and Angela Hartnett, I heard powerful examples that demonstrate the Government’s lack of deep understanding of the sector. To be clear, there is enormous gratitude for the considerable support that the Government have provided through the billions spent on measures such as the job retention scheme, the business rates holiday and various grants, including those announced by the Chancellor last week. The Government would do a lot better, however, if they stopped seeing the sector as being amenable to a one-size-fits-all approach. Ministers’ main lever for controlling the virus over the last nine months has been to switch the entire sector on or off at a moment’s notice, with little consideration given to its complexity and diversity.
When restrictions were eased over the summer, we saw the reopening of large chain pubs—with customers often bunched together at outside tables—at the same time as small restaurants and bed-and-breakfasts, where social distancing is easier to maintain. The curfew policy suffered from the same one-size-fits-all mindset. It was evidently drawn up with bars in mind, but unlike restaurants they do not have to turn over tables. The curfew might have been appropriate for a city centre bar—although there were many issues with large groups of customers all leaving at the same time—but it made no sense for small restaurants or rural hotels, which might have been unable to safely spread out the accommodation of all their guests for dinner as a consequence.
August’s eat out to help out scheme, although clearly popular at the time, was seemingly designed with little regard to whom it would help and the incentives that it would create. Rather than supporting those who are struggling the most, it potentially ended up being an untargeted giveaway to customers and businesses. It also made eating out much cheaper relative to takeaways and, in retrospect, helping restaurants by targeting subsidies at takeaways might have been more effective at boosting sales while maintaining the social distancing that is so required.
I understand that there are reasons why the Government have made lockdown announcements very shortly before their introduction, but that has caused some real issues for the sector. I was told of a chef in London who had two tonnes of oysters delivered just two hours after London entered tier 3, with no customers to serve them to. Yesterday, we heard reports of chickens possibly being culled due to a fall in bulk egg orders. When hotels were closed by national lockdown or entering tiers 3 and 4, hoteliers were left guessing whether they were even allowed to serve their guests breakfast in the morning. I know that these are not decisions that any Minister takes lightly, but if it is genuinely not possible to give more notice of such changes, what more can the Government do to support businesses that are caught off guard?
The repeated shutdowns of the hospitality sector have also meant that the businesses that supply it have been forced into hibernation for much of the past year. There is a whole other set of issues there that the current support measures—which are largely designed around jobs and rent, not around businesses holding large amounts of stock, often perishable—just do not reach. Little financial support has been available throughout the pandemic. With severe restrictions in place across the country since the autumn, demand for their stock has diminished seriously.
I also worry about the impact of that on-off cycle on the mental health of the staff who work in the sector. They have had to return suddenly to public-facing roles, turning on the charm and smiling at customers, when they do not know whether they will be able to hold on to their jobs for much longer. It has been great to see the widespread recognition of the strains that lockdown has put on the nation’s mental health, but we need to pay particular attention to the sectors most affected.
Thanks to the ingenuity and dedication of scientists in the UK and across the world, there is now a clear way out of this crisis. We know that the economic disruption will not be permanent. We will, no doubt, expect hospitality to play a significant part in the hoped-for bounce back of economic activity and employment, in particular among young people. We have good reason to believe that for at least the businesses that manage to survive.
The pandemic has concentrated a tremendous amount of economic pain on workers in certain sectors, predominantly insecure workers, and they deserve our utmost support. However, there has also been a build-up of savings among those more fortunate, who have been able to maintain a steady income. Many have saved the money that they used to spend on bars, hotels and restaurants, rather than splurging it on more parcels from Amazon, but there are limits to how much of that will ultimately be spent on hospitality in due course. In all likelihood, people are likely to go out to the pub two or three times a week, eventually, but that will not happen soon.
There will be a catch-up on spending in that social consumption—or we very much hope so—when things eventually return to normal. As the nation is vaccinated, the economy reopens and the rules we apply in hospitality inevitably become more nuanced and complex, it is important that we have input from the hospitality sector as to how we can design policy not to repeat the mistakes that were made in the summer of 2020 when the sector reopened.
We need to get ahead of the problems, and the petitioners have argued that splitting that representation between two crowded Departments—the Department for Business, Energy and Industrial Strategy, and the Department for Digital, Culture, Media and Sport—is not working. One of the leading supporters of the petition, Robin Hutson, put it succinctly:
“I’ve long held the view that the hospitality sector requires really focused representation in government. This is about the future of our industry and the campaign and petition showcases the strength of feeling across the country on this issue. Hospitality is a sector that deserves a seat at the top table.”
That responsibility sits across two Departments, which is not a problem. Hospitality sector businesses are businesses, but they are also a creative art—in fact, much of the arts sector relies on hospitality as a source of revenue to underpin its activities. We used to have more Ministers with cross-Department briefs, out of recognition that some issues unavoidably straddle Government Departments, but that seems to be out of fashion at the moment. I worry that it creates an incentive for passing the buck between Departments, which reinforces the case for a Minister for hospitality.
It is hard to believe some of more farcical debates that we have had, such as the controversy about whether a Scotch egg constitutes a meal. If we had a dedicated hospitality Minister, we might not have ended up with that mess. If a new ministerial role is not something that the Government are open to, we must at least recognise that the sector needs a strong voice in Government, with a genuine recognition of its diversity, greater engagement with businesses and a much deeper understanding of the different ways that they are affected by lockdown measures.
The hospitality sector is an industry that has always been driven by passion and soul. It is not an industry in which businesses generally have huge amounts of cash reserves, and we know that many businesses operate at just above break-even point. The industry knows it needs to encourage more home-grown talent, now that it cannot rely on people coming over from Europe. There is a levelling-up piece here, as I have mentioned. Hospitality is one of the few industries that is represented in almost every part of the country. It is an industry that is a gateway for so many people who do not particularly enjoy the academic side of school but who have creativity and graft and can be successful, if just given the chance. If the Government understood and took the industry seriously, it could be a route to transformation in every community right across the country. We need to raise the profile of hospitality and encourage young people from the UK to do apprenticeships and to see entering the industry as a “sky’s the limit” career. As we set out our stall on the world stage in the post-Brexit era, one of the key things that will attract people to our country—with their investment—is our culture and its offerings, and a big part of that will be the richness and quality of our hospitality.
Newcastle’s hospitality sector has something for everyone: restaurants offering everything from hearty traditional Geordie pub grub to innovative fine dining, hipster-style hang-outs for craft beer and gourmet burgers, and a thriving street food scene. Our nightlife is famous in its own right and is regularly featured in guides and magazines—Newcastle is often one of the top places for an unforgettable night out. However, my fear in the current situation is that the larger, more standardised chains will have the resources to survive into the post-pandemic era, but the smaller, heart-and-soul operations might not. We will see a hollowing out of the sector. I do not want to see my city lose any part of what makes it unique, and I am sure colleagues feel the same way about their areas.
I know there is a limit to how much heart and soul people can give when they have been hammered month after month. Even in the best-case scenario, there are several months of closure ahead. Countless smaller owner-operators are now worse off than they were when the pandemic began. Some took out personally secured loans in March. Having spent the last nine months in difficulty, they are now looking at losing not only their businesses, but their homes. It is a real tragedy, because they were good and viable businesses before this unseen crisis came along.
What does the sector need? The one-off grants announced by the Chancellor last week will of course be strongly welcomed, and they should help more businesses to stay afloat. The resource that the Government have put in through the job retention scheme has been a lifeline to sector employees, but industry representatives have made it clear that the current support is not enough to cover the costs of many businesses and will not secure their long-term viability. We need a longer-term plan to help businesses to plan their survival while the vaccine is rolled out, starting with clarity on how long the new support payments will be available. UKHospitality and others have called for an extension of the business rates holiday and a 5% VAT rate, to provide certainty in the longer term. I would be grateful if the Minister commented on whether that is under consideration.
I also urge the Government to commit to examine urgently the inadequacies of their support measures as they relate to hospitality suppliers and, as I said in our previous debate on the night-time economy, to consider introducing some flexibility to the local restrictions support grants, to give local authorities the freedom to grant and target support towards the businesses that need it and can use it best.
The petitioners do not expect to go back to dining out, dancing in nightclubs and checking into hotels straightaway; the public health situation is at a critical point, and saving lives must take precedence. However, they want there to be a greater understanding of the diverse nature of their sector and a strong voice for them in Government. Above all, and like us, they want this country’s mix of pubs, hotels, restaurants and clubs, which does so much to enrich our lives, to still be standing when this crisis is over.
The requests of the businesspeople I met are straightforward, to make sure that they can get through the next few weeks. They ask for the Government to reconsider the requirement to pay national insurance on furloughed employees, given that, at the moment, zero revenue is coming in; to extend the business rates holiday and VAT cut, to reflect the fact that the closure of businesses has been for much longer than was expected; and to extend the terms of the loan scheme, so that these businesses can finance themselves for these crucial few months and so that, at the end of that time, everyone in this Chamber can join together and look back at a pandemic that is over, raising a drink and celebrating the success of continuing businesses.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will present a 10-minute rule Bill tomorrow, advocating the abolition and reform of business rates. That would really help pubs and other hospitality outlets, both with immediate effect, and into the future, giving pubs the chance to remain the centre of our communities. In supporting my colleague’s aim I ask that business rate relief for the hospitality and leisure sector be extended for a further year to include related businesses during the pandemic.
The best way out of this crisis, for business, is to be able to trade. For businesses to be able to do that with confidence, we need the people we are most concerned about in our communities to be vaccinated, and we are well on the way to achieving that—