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Hospitality Industry: Government Support
11 January 2021
Lead MP
Catherine McKinnell
Newcastle upon Tyne North
Lab
Responding Minister
Paul Scully
Tags
NHSEconomyTaxationEmploymentBusiness & TradeBenefits & WelfareMental Health
Word Count: 14774
Other Contributors: 19
At a Glance
Catherine McKinnell raised concerns about hospitality industry: government support in Westminster Hall. A government minister responded.
Key Requests to Government:
The petitioners call for a Minister dedicated to hospitality affairs to ensure sector-specific representation at the heart of government. They also urge the government to extend business rates holidays, consider a lower VAT rate of 5%, examine support measures for suppliers, and introduce flexibility in local restriction grants to better target those who need assistance.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The hospitality industry faces significant challenges due to repeated lockdowns and lack of understanding from the government. With over 3 million jobs at stake, there is a need for dedicated support measures tailored to the sector's diversity, including addressing mental health issues among staff and supporting suppliers who have been severely impacted by closures. The debate highlighted concerns about the economic impact on local economies with high hospitality employment, potential hollowing out of unique businesses in favour of larger chains, and the need for more nuanced policy approaches as restrictions ease.
Ben Lake
PC
Ceredigion Preseli
Hospitality businesses in Ceredigion employ about 16% of the workforce. Measures like furlough have been vital, but many business owners have had to use personal savings to stay afloat. The Treasury should consider extending support measures such as business rates holiday and VAT reduction scheme into 2022.
Warrington North
The speaker focused on the pub trade within the hospitality industry, criticising the lack of scientific basis for some pandemic-related restrictions. She expressed anger at rules that led to public resentment and non-compliance, and called for a financial package recognising losses and contributions made by pubs.
Damien Moore
Con
Southport
The hospitality sector, especially in Southport, has been severely impacted by the pandemic. Pubs and other businesses provide crucial community support. The industry accounts for 30% of local economy and supports jobs through annual events. Support measures like furlough have been essential but a clear roadmap and collaboration with industry are needed.
Greg Clark
Con
Tunbridge Wells
Welcomed the furlough scheme and other support measures but highlighted the need for further assistance to ensure hospitality businesses survive until the pandemic ends. Emphasised that these businesses contribute significantly through VAT and PAYE, with a survey showing local hospitality venues collectively paid £4.4 million in VAT and PAYE before the pandemic.
Ian Paisley
DUP
North Antrim
The right hon. Gentleman's argument is supported by a petition with over 200,000 signatures calling for a Minister dedicated to hospitality affairs.
Ian Paisley Jnr
DUP
North Antrim
Mr Paisley acknowledged the importance of the hospitality sector in Northern Ireland, noting that 60,000 people directly work in it. He mentioned the significant economic contribution made by tourism and highlighted the need for a VAT cut extension and a kick-start plan to support businesses reopening.
James Wild
Con
North West Norfolk
The hospitality sector in North West Norfolk contributes around £500 million annually and employs a fifth of the local workforce. However, businesses have been disproportionately affected by the pandemic with younger people hit hardest. The current restrictions on selling alcohol in takeaway containers are seen as unfair. Businesses need more support to survive until the vaccine rollout is effective.
Jane Hunt
Lab
Loughborough
Ms Hunt highlighted the impact of the pandemic on businesses in Loughborough that are part of or related to the hospitality sector, which includes pubs, restaurants, wedding event organisers and venues, lighting technicians, food production plants, breweries, and catering equipment suppliers. She noted a 92% drop in economic output in April 2020 compared with February 2020 and raised concerns about a lack of confidence among customers regarding when the sector will reopen.
Jim Shannon
DUP
Strangford
Mentions wedding venues and emphasizes the importance of involving all regions of the UK in supporting the hospitality sector.
John Spellar
Lab
Warley
John Spellar highlighted the importance of the hospitality industry as a driver of the economy and social fabric. He criticized short-notice government restrictions such as the 10 pm curfew, which made no sense from an epidemiological perspective. He also suggested that the industry needs a dedicated champion in Whitehall to address its multi-departmental challenges.
Julian Lewis
Con
New Forest East
The speaker highlighted the importance of the hospitality industry, noting over 206,000 signatures on a petition supporting this cause. In his constituency alone, almost 300 businesses in food and accommodation sectors employ 4,000 people. He argued for a dedicated Minister to represent the sector's interests at the core of government due to its size and significance.
Lucy Powell
Lab Co-op
Manchester Central
Lucy Powell highlighted the significant impact of government support on the hospitality sector, noting that despite initial efforts, current measures are insufficient for a prolonged closure period. She cited the high number of signatures on a petition related to this issue and emphasised the need for long-term planning and comprehensive support from the government. Powell expressed concerns over business insolvencies and job losses due to piecemeal support and stop-start restrictions. She advocated for a clear route map for reopening based on vaccination rates, hospitalisations, and mortality levels.
Mark Pawsey
Con
Banbury
Mark Pawsey highlighted the impact of the pandemic on suppliers to the hospitality sector, noting that many suppliers are not receiving the same level of support as trading companies. He mentioned food purchases shifting from out-of-home to in-home consumption and the challenges faced by supply chain businesses due to stock wastage and high fixed costs.
Navendu Mishra
Lab
Stockport
Navendu Mishra stressed the importance of the hospitality industry for employment and economic contribution, noting that current measures like furlough payments are insufficient. He called for more supportive measures such as extending the furlough scheme beyond April, providing business rates relief until full reopening, and implementing safety net measures like Government-backed indemnity insurance.
Rupa Huq
Lab
Ealing Central and Acton
Critiqued the impact of coronavirus on the hospitality industry, noting it faces existential threats from forced closures and economic crisis. Called for a dedicated Government Minister to champion the sector's interests and proposed extending furlough, rent, rates, and VAT relief. Will the Minister give way?
Stephen Doughty
Lab Co-op
Cardiff South and Penarth
Turnover for hospitality businesses has dropped by 40%, with 41% at risk of failing this year. The Welsh Government's economic resilience fund is a positive step, but support must be maintained. Pubs like Brains Brewery face significant challenges and cultural heritage risks. Will the Minister give way?
Steve Brine
Con
Winchester
Agrees with the need for a stronger voice for hospitality within government, noting that coffee sales are not essential despite being common.
Steve Double
Con
St Austell and Newquay
The hospitality sector plays a vital role in the economy, creating one in six new jobs over the past decade. Steve Double praised the Minister's availability to address concerns but noted that businesses have had to close quickly due to public health decisions, resulting in significant financial losses.
Tobias Ellwood
Con
Bournemouth East
Supports the call for a hospitality Minister or an envoy to represent the sector, highlighting its significant impact in Bournemouth.
Government Response
Paul Scully
Government Response
I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing the debate and representing the petitioners so well. Hospitality has been one of the hardest pressed sectors over the pandemic, with the sector employing around 3.5 million people overall and generating revenues of around £63 billion a year in normal circumstances. We have responded with an unprecedented package of support worth £280 billion, including grants, the furlough scheme, various loan schemes, business rates holiday, VAT deferrals, and the eat out to help out scheme. Additional funding worth £4.6 billion has been released to help 600,000 hospitality businesses through the current lockdown. The policy levers in both BEIS and DCMS are employed effectively to benefit the sector. We will continue to work with hospitality businesses to get them through the immediate crisis and then help them to build back stronger and greener.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.