Debate on e-petitions relating to Government support for the hospitality industry | Westminster Hall | 4:30pm – Monday 11 January, 2021
Today, I would have wanted to have spoken in the debate in Westminster Hall. However the continued belief of the Leader of the House, that MPs should be in Westminster to debate, and due to the very serious health emergency in London, I am having to present my speech in an alternative way from my constituency in York.
Over the coming weeks, I will be publishing speeches, and writing to Ministers, in order to ensure that I represent my constituents and they have their voice heard.
Hospitality plays a major role in the UK economy. It is the third largest sector providing 3.2 million jobs, £133.5bn to the economy and returning £38bn in tax to the Treasury. It employs people in pubs, restaurants and cafes, hotels, guest houses and B&Bs, is at the heart of the events industry and is accompanied by a significant supply chain in catering, the food and drink sector and many more trades. Hospitality is the place where our communities meet, it is where we make our friends and connections and plays a significant part in our culture.
Representing York, I know all too well the value of the sector. We receive over 8.4m visitors each year from around the world who spend £765m in the city each year, and our vibrant hospitality sector is the heartbeat of our city. It is a major provider of jobs with 24,000 jobs in tourism and hospitality in York, as York is a centre for good food, craft ales and if it isn’t obvious, the most incredible place for anyone to visit and stay.
The hospitality sector is central to the whole York experience.
During the height of this crisis, the hospitality sector pulled together to form the ‘Supper Collective’ to provide meals for the most vulnerable in the city, delivered by an army of volunteers. It is a sector that plays a strong role in our communities throughout the city, and is integral to making our city what it is economically and socially.
However without the support necessary from Government, then clearly the sector will fall over. The sector has been hit seven times harder than the economy as a whole. York itself is expected to be one of the worst hit economies in the country due to its footprint in tourism, hospitality and retail. The Council’s Recovery Board estimated a £847m drop in GVA and potential loss of 17,500 jobs as a consequence of Covid across all sectors, and this before this latest wave of the virus, so the outlook now is even bleaker.
While welcoming the grants that the Chancellor announced of £9k, it was too late for many in the industry, it also looks unlikely to reach the essential network of supply chain businesses that enable the sector to thrive. We still need to ensure that there are sufficient funds to bridge the gap between now and the next phase of easements once Covid is locked down and the vaccine has protected the most vulnerable.
I have had concerns with some of the Government measures to date. By observation, groups of 6 have gathered, but not socially distanced. Because you can gather in groups of 6, it does not mean that the virus won’t travel between you. I would want this rule to be made clear that if you are outside of your household that you must be 2m apart, wear face coverings when able and maintain good hygiene.
I question if ‘Eat Out to Help Out’, also seeded the second wave of the virus. Helping out Covid through going out for a meal with friends and family, certainly brought younger people together in social spaces, unmasked, and the same age group were prevalent in the second wave of Covid19.
As lockdown is next eased, more biosecurity must be in place, which means that more economic support will be needed.
Once Covid-safe, the hospitality sector will return, however without meeting the demands of the sector, made conservatively to provide urgent help, but certainly not making up for the significant losses of the sector, these measures would simply make the difference between venues having a future or not.
I echo the call to extend the Business Rates Holiday. Many will know that I have long called for Business Rates reform, leading a debate in Westminster Hall on the issue. It is a broken system and does not reflect modern business. My city has over inflated property values, due to the opportunities landlords have taken to push up the value of their investment portfolios, and thus valuations match their demands. I have advocated a profit-related tax or turnover tax. If we are to build back better, I would ask the Minister if he would ensure that we move forward to a new, better system.
Maintaining the furlough scheme into the summer, introducing more flexibility with time would be fair. Last year I met with many hospitality businesses, first hit when the first UK Covid case was announced in York last January, they then ceased trading with the February floods, their recovery was then met by Covid lockdown 1. They then had further floods in the autumn and then again before New Year. It really has been a challenging 12 months. Businesses need flexibility to recruit staff and retrain staff in new Covid19 secure practices.
To stimulate bookings the sector is calling for the VAT reduction to be extended until the end of the year. Stimuli into the economy is needed to assist trade and protect business.
We also need to see action on commercial rents. I have spoken much about how most of the grant money has slipped through the hands of local businesses, to go straight into the pockets of commercial landlords in many cases in York City Centre the Tier 3 grant payments covering as little as third of the rents. In York, many landlords are off-shore, residing in those tax havens. I have questioned whether this is a good use of tax payers money to feed the lifestyle of those that have jumped through the tax loopholes. We need to see significant reform of the rights of commercial landlords, and to start seeing more responsibility demanded. I ask Government to undertake a review of commercial properties, and how we bring their owners into having obligations to the places they have invested.
However we must recognise that the industry must reform too – low wage, seasonal work has contributed to York becoming one of the least equal cities in the country. It is the hospitality sector which first let many of its staff go last March, with no protection. A year on about 20% of the jobs have disappeared altogether. We must see an end to zero hour contracts in the industry, low pay, which drives people to work extortionate hours, and we have to see cultural change. I have met many of those working in the kitchens of restaurants and cleaners working in local hotels who have related the insecurity, poor pay and conditions they work in. The bullying cultures that have evolved, and then being slung out of work the moment Covid arrived.
Building Back Better, means that the hospitality sector has to clean up its act too.
There are good example of best practice in my city, and it is this we should be aspiring to. We are supporting the Good Business Charter in York – bettering work, business, the environment and society.
If this ambitious agenda means that we need a dedicated Minister, then I would hail that as a positive. The sector are calling for the Minister to have the following role:
- Be the champion and guardian of Hospitality in Parliament, promoting the importance of the economic, social and employment contribution
- Be fully invested and have deep understanding of this complex industry
- Drive cohesive thinking and strategy at the top table including of all sub sectors
- Advance the status of hospitality and tourism.
So, while backing the call for a Hospitality and Tourism Recovery Fund, as my city, probably more than most, could really benefit from this, I say to the Minister, no more handouts without knowing where the money is going and that it will be used to bring about significant cultural change in the sector.
- Everyone having good pay, terms and conditions, and a secure job
- Everyone having access to skills and training, including an apprenticeship in the industry
- An end to the bullying and exploitative culture
- A new deal for pubs, so they can be a community asset and a place to gather
- Public health has left its mark, while for now all venues must be completely biosecure, we know that venues can also play a major role in gathering people who are isolated and lonely, providing space for people to mix and come together, holiday together and make new friends.
We need to build back differently and better. Covid has shown us the things that really matter, we must now all rise to the challenge of renewing the sector, our communities and our nation.