Selaine Saxby (North Devon) (Con) I beg to move, That this House
has considered fiscal support for tourism and hospitality in
coastal areas. It is a pleasure to serve under your chairmanship,
Mrs Cummins. Today I wish to highlight the vital role of
hospitality in our coastal communities, such as my North Devon
constituency, and the support that the sector needs and deserves. I
thank UKHospitality for its ongoing work and support on this
matter. I had the opportunity...Request free trial
(North Devon) (Con)
I beg to move,
That this House has considered fiscal support for tourism and
hospitality in coastal areas.
It is a pleasure to serve under your chairmanship, Mrs Cummins.
Today I wish to highlight the vital role of hospitality in our
coastal communities, such as my North Devon constituency, and the
support that the sector needs and deserves. I thank UKHospitality
for its ongoing work and support on this matter. I had the
opportunity to bring Kate Nicholls, its chief executive officer,
to North Devon last year to meet some of the fabulous hospitality
businesses and hear their frustrations as well as their plans for
the future. We visited businesses such as the Saunton Sands
Hotel, the Carlton Hotel and the George & Dragon in
Ilfracombe, and SQ Bar and Restaurant in Braunton.
Some of the challenges facing the sector are not always obvious,
particularly in remote coastal locations. Hospitality venues
extend far beyond just pubs, hotels and restaurants, and include
holiday parks, music venues, bowling, children’s play centres,
bars and clubs, which contribute so much to all our enjoyment of
coastal areas and resorts as well as to the economy.
I have been lobbying Ministers for quite some time to continue to
find solutions to ensure that this vital part of the economy of
North Devon and so many other coastal areas continues to thrive.
I thank this Minister—the Financial Secretary to the Treasury, my
hon. Friend the Member for Mid Worcestershire ()—who I know is a champion
for the sector, for his ongoing patience and engagement in
listening to my concerns and those of my constituents.
My hon. Friend visited Ilfracombe back in 2021 in his previous
role as Minister for tourism. We met several business owners and
discussed business rates, VAT thresholds and Ilfracombe’s
ambitions in hospitality. I am sure that he recalls the unanimous
voice of Ilfracombe’s tourism sector calling for the Government
to raise the £85,000 VAT threshold, which currently sees much of
Ilfracombe, like so many coastal communities, close its doors
when the businesses reach the threshold. When first elected, I
naively thought that that was just seasonality, but as
staycations came back into vogue post pandemic, we saw some
businesses close in mid-August as the threshold was reached.
Indeed, a local accountant told me just last weekend that he
advises all his hospitality businesses to remain below the
threshold. At a time when we are looking for our economy to grow,
why do we have a threshold that creates a cliff edge that does
the exact opposite for the hospitality sector?
North Devon alone is home to nearly 2,500 hospitality venues,
employing more than 8,000 people and contributing more than £400
million to our local economy. The hospitality sector’s success is
vital for economic prosperity and plays a crucial role in shaping
the very essence of our community. Yet despite the resilience
inherent in the sector, recent years have presented unprecedented
challenges, particularly in our coastal towns. The impacts of the
covid-19 pandemic, coupled with the energy crisis and a labour
market grappling with record vacancy levels, have stifled growth
and posed significant threats to the sustainability of
hospitality businesses—but I also want to draw on the positives
that have happened. With all the challenges presented, the
Government supported the sector substantially during the
pandemic, not least with the furlough scheme, which continued
even if hospitality venues were shut.
(East Devon) (Con)
I thank my hon. Friend for securing today’s debate. She is making
a barnstorming speech about Devon, which may even make me traipse
slightly further north in Devon to her constituency to help out
her industry. As we know, the hospitality and tourism industry in
Devon supports thousands of jobs. As chair of the all-party
parliamentary group for hospitality and tourism, I want the
Government to build on the record that she has been describing of
support for the industry in Devon and the UK. The trade
association UKHospitality—whose CEO, Kate Nicholls, my hon.
Friend has already mentioned—has three asks of the Chancellor of
the Exchequer for the upcoming Budget: first, implementing a 3%
cap on the increase in the large property business rates
multiplier; secondly, introducing a cut in the lower rate of
employers’ national insurance contributions to 10%; and
thirdly—this is a big one—permanently reducing the VAT rate for
hospitality businesses to 12.5%. Does my hon. Friend agree that
those measures would really help and provide a big boost for jobs
and investment in her part of Devon and my part of Devon?
I thank my hon. Friend and neighbour for his contribution; it is
as if we both speak to the same group! I agree entirely with his
contribution, as I so often do. I am very keen that Devon
hospitality businesses, right the way across and down the
peninsula, can benefit, and that the Minister will hear our
asks.
We cannot underestimate the pandemic’s impact on businesses. The
hospitality sector came out of covid-19 heavily indebted. I hope
that the financial sector can look at what more can be done to
support hospitality businesses to repay their debts, which
currently stand at £8 billion in bank debt and £2 billion in
landlord debt. The pandemic harmed hospitality businesses and
made their recovery much more difficult.
Although I warmly welcome the small business rate relief that was
introduced in the autumn statement, which provided some support,
up to two thirds of hospitality businesses find themselves
excluded—not due to generating immense profits, but because they
operate in larger premises in high-footfall areas. Consequently,
the impending 6.7% rise in business rates and skyrocketing wage
costs present a daunting prospect for the survival of many
businesses.
While I applaud the Government’s commitment to creating a
higher-wage economy, it is crucial to acknowledge the unique
challenges faced by hospitality businesses, especially those
based in coastal areas like my North Devon constituency, which
are often small in scale, seasonal and working to tight margins.
These businesses anticipate a 17% increase in staffing costs from
April, with 98% of them expressing concern about how to manage
the impact of the upcoming national living wage hike. Many of the
businesses that should have benefited the most from the small
business rate relief actually face wage rises in the hospitality
sector that far exceed the business rate relief itself.
We are already seeing hospitality businesses contracting their
hours and reducing the number of staff they employ or the hours
that they work. Far too many of our pubs are now open at weekends
only or cannot find chefs, so have some nights without food
service, which reduces their profitability even further.
Although the national living wage hike was warmly welcomed by the
hard-working teams who work across our hospitality businesses, it
is a headache for business owners, who themselves frequently earn
significantly less than the national living wage, due to the
extensive hours they work and a reliance on their businesses’
ever- declining profitability to pay their wage. Far too many of
our hospitality businesses face a crunch this April. Too many of
the sums that we do up here rely on a 35-hour working week.
Hospitality is a 24/7 business, and in remote coastal areas with
low unemployment, such as my North Devon constituency, many
members of staff are also much younger. The increase in the
national living wage will hit those businesses particularly
hard.
One key ask today is for a cut in the lower rate of employer
national insurance contributions to 10% and consideration of
increasing the threshold in order to share the burden of this
policy between business and Government, but the biggest ask from
my hospitality businesses across North Devon—I had the pleasure
of chatting to many landlords in some of the fabulous pubs back
home during the recess—is because their VAT burden is too high.
In the hospitality sector, VAT is significantly higher than it is
elsewhere in Europe, putting us at a competitive disadvantage.
During covid, we saw huge success from the reduction in VAT for
the hospitality sector. In that time, 70% of hospitality
businesses benefiting from the VAT cut passed it on to consumers,
in order to keep prices low. A hugely successful local pub shared
its figures with me. With a turnover of just over £1 million, it
is paying 25% in tax just in VAT and employment taxes. That is a
quarter of a million pounds going to the Exchequer before payment
of bills and wages, and payments to suppliers, are even
considered.
Last year, we lost 3,000 hospitality venues in the UK, and I am
concerned that if the Government do not take further action to
share the burden of this tax cost, we may lose even more this
year. Unfortunately, there is one recent case in my North Devon
constituency; Broomhill Estate is closing due to VAT costs. I
thank Alex Kleiner for all his work and for letting me know how
much of an impact a reduction in VAT from 20% to 15% would have
made to his business. I heard directly from Alex, a business
owner, that there would have been three benefits: a reduction in
absolute VAT; an impact on cashflow; and an uplift in footfall
because of more attractive pricing, although that is harder to
quantify. He said in
“4 out of the past 7 quarters 5% VAT reduction would have
completely offset my electricity bill.”
Unfortunately, in this instance any changes to VAT will come too
late for such an important landmark in North Devon.
Although I know that it is a big ask, I hope that the Treasury
might again consider a reduction in the VAT rate for the
hospitality and tourism sectors—to 12.5%—as that would help them
to overcome the above inflation increases in tax and the national
living wage, avoid further inflationary price spikes and unlock
investment. The measure aligns with international standards,
stimulating tourism and offering domestic tourists a more
affordable alternative to travelling abroad. I am confident that
not every publican and hotelier is wrong in telling me that this
is the one measure that would help them the most. A cut—even a
temporary one—would be a boost.
For so many coastal communities, their tourism industry has
changed since the hotels were built in the Victorian era. Many
have large properties that may not benefit from all-year-round
occupation, particularly in those communities where swathes of
the tourist attractions, shops and restaurants have closed for
the winter because of the VAT threshold issue. Hospitality
businesses rely on space to host people and therefore have larger
premises in high-footfall areas. Businesses in the industry will
often hit the upper rateable value band at a far lower turnover
or profitability than others. The hospitality sector pays 2.5% of
turnover on business rates, which is 10 times that of banks and
insurers. I hope the Treasury is looking at the introduction of a
cap on the increase in the large property business rates
multiplier at 3% in England, aligning with the expected inflation
rate in April. Additionally, I hope the devolved Administrations
in Scotland and Wales pass on the benefits of that relief in
full.
(Witham) (Con)
I thank my hon. Friend, first, for securing the debate and
secondly, for her compelling fiscal case for the reforms that,
frankly, are essential. We have been here in recent weeks talking
about the same thing. In addition to fiscal measures, does my
hon. Friend agree that we need supply-side reforms for coastal
communities? Many of our constituents in coastal communities feel
isolated. She has spoken about labour market shortages. We need
to make sure that we have public services, NHS doctors,
education, employment and banking facilities in those communities
that serve their purpose, make those places healthy and help them
to thrive, therefore increasing the footfall for the hospitality
trade as well as the employment market for hospitality.
I could not agree more with my right hon. Friend that there are
many asks for our coastal communities; I have spared the Minister
the rest of mine this afternoon. While I am here, however, it
would be remiss of me not to mention alcohol duty. The freeze on
that duty at the autumn statement was welcome, but it does not
directly help our much-loved pubs, which have reported
significant price increases from brewers and other producers
despite the freeze. A reduction in VAT would leave the choice to
pass on and/or reinvest in the hands of the retailer and not with
the multinational brewery in the case of alcohol. I have
continuously supported the Campaign for Real Ale’s campaign, as
it would play a crucial role in stopping our many vibrant pubs
and hospitality businesses going under. Whatever the scheme, a
reduction bringing us in line with the clear majority of our
European neighbours—permanently or even temporarily—would be a
lifeline for our hospitality venues.
While talking about great pubs, I will take the opportunity to
highlight The Bell Inn at Chittlehampton, as well as
Chittlehampton Village Shop, which serves excellent tea and cake;
both are finalists in the Countryside Alliance awards, and voting
is now open for anyone who would like to help them along.
The potential of the hospitality sector to contribute to economic
growth cannot be overstated. UKHospitality’s economic evidence
submitted to the Treasury outlines the conditions required for
growth, estimating the creation of 500,000 new jobs by 2029 and
an annual growth rate of up to 6%. I hope the Treasury will
carefully examine the evidence and arguments presented,
recognising the immense potential that the hospitality and
tourism sector holds for the UK. By supporting the sector, we not
only ensure the prosperity of businesses but contribute to
increased tax revenues that fund essential public services.
I am hugely reassured to see the Financial Secretary to the
Treasury, my hon. Friend the Member for Mid Worcestershire here
today, as he has been to see us and understands so much more
about our tourism and hospitality sector, particularly in remote
coastal locations such as my beautiful North Devon constituency.
I hope that may influence some of those critical Budget
decisions.
1.44pm
(Strangford) (DUP)
It is a pleasure to serve under your chairship, Mrs Cummins. I
thank the hon. Member for North Devon () for leading the debate. She
is always very enthusiastic and zealous about her constituency. I
always like to hear what other right hon. and hon. Members say
about their constituencies, because I find it mirrors what I have
to say about mine.
I am going to take a wee step down Strangford way, and talk about
some of the good things we have back home. I also want to support
the hon. Lady in what she put forward, because this issue is so
important. She represents and clearly understands a coastal
constituency, which she is so passionate about. It is fantastic
to be here and support her, as all our constituencies have those
similarities. In another debate, she mentioned the impact that
the recent storms and weather have had on businesses in her
constituency. I was there for that one as well, and that is
certainly something that needs to be addressed.
We are here to discuss many things. We look to the Minister, as
we always do. He is always receptive to our comments and has an
ability to respond in such a way that we all feel encouraged. We
will feel better encouraged, of course, if there is some help
financially or some ideas at the end. I am sure the Minister will
have those ideas; I have no doubt about that. I am also pleased
to see the shadow Ministers for the SNP and the Labour party, the
hon. Members for Coatbridge, Chryston and Bellshill () and for Ealing North
(), in their places. They are
both committed to making lives better and to ensuring that help
for tourism and hospitality in coastal areas becomes a
reality.
Why do I enjoy these debates? I enjoy them because, right away,
there is a subject matter that I can relate to. The hon. Member
for North Devon spoke very well about her constituency. These
debates give me an opportunity to understand other areas, but
also to show off the beauty of my constituency of Strangford.
What is known as the Ards peninsula consists of numerous villages
such as Ballywalter, Portavogie and Portaferry, which have
stunning scenery. Strangford lough is an area of outstanding
natural beauty and a Ramsar-designated area as well, so it is
really important. I am privileged to live on the edge of that
area.
There are many tourism attractions and hospitality businesses
that are pivotal to the local economy and play a huge role for
local visitors. I will try to do as the hon. Member for North
Devon did. The businesses in my constituency are often family
run, so when I speak about the individual businesses, I speak
with the knowledge of having known them for many years. There is
such a variety on offer. What makes Strangford so special is all
those businesses that come together in the tourism and
hospitality sector along the coastal areas.
We have numerous tourist attractions, such as the National Trust
grounds at Mount Stewart, between Carrowdore, Greyabbey and
Newtownards. Mount Stewart really is the jewel of the crown for
Strangford, with well in excess of six-figure sums of people
coming to visit at all times of year. During covid, those numbers
did not drop very much. It has fabulous walks and hosts events
such as jazz nights in the summer, not to mention the fact that
it is a much-used location for weddings.
Another example of what we are doing is the land in Ballywalter
that was transformed into a minigolf course as part of the farm
diversification scheme. Jim Davidson, the guy I sat beside in
primary school—that was not yesterday—is in farm diversification,
and that is one of the things he has come up with. It is much
loved and visited by families and couples from all over. It is
has become a fun day for families whenever they are about. The
sheer volume of hospitality that is offered is just incredible.
You can probably guess, Mrs Cummins, that I am very enthusiastic
and proud to tell others about it. I have told some Ministers
here. The Minister in his place will no doubt be booking his trip
to Strangford before the day is out, as a former Minister did.
She came to visit my constituency and she enjoyed her time across
the water.
Glastry Farm ice cream is another example of farm
diversification. One of the dairy farmers in that area realised
that there was potential for his ice cream. He has been
developing that over the years and has done exceptionally well.
Echlinville gin distillery is one of many gin and whiskey
distilleries that we have across the constituency. The owners of
Harrisons of Greyabbey are family friends and my next-door
neighbours. It came out of nowhere and they have built it up into
a restaurant, a café and a garden centre. The hospitality costs
are part of the problem for them. They have a lovely, visual
venue that looks right over Strangford lough, which is quite an
attraction.
Local DUP councillor, David Kerr, started his own fruit and veg
shop from his farm in Kircubbin; fantastic B&Bs in the
village of Ballywalter, and a hotel in Portaferry, provide warm
and homely accommodation for tourists; and the window of the very
much sought after Orange Tree wedding venue—where I attended my
niece’s wedding just last year—has a view of Strangford lough, so
is coastal in every sense of the word. All the businesses I have
mentioned, like those in the hon. Lady’s constituency, create
jobs, wage packets in people’s pockets and opportunities for
young people who want to have a part-time job or to start off
somewhere. It is vital that the tourism and hospitality issue in
coastal areas is addressed so that those jobs and opportunities
can be retained. The list of what is on offer is truly
endless.
As the hon. Member for North Devon said, exceptional
circumstances, such as weather conditions, ultimately play a
massive role in footfall at coastal areas. Especially after
covid, we have witnessed many places shutting down as they cannot
sustain the lack of business; it is just impossible for them to
carry on. Furthermore, the rise in the cost of living has had a
significant impact on businesses’ ability to pay their bills. I
know that is true of the retail trade and those involved in
hospitality.
Colin Neill is one of those guys who represents the industry; he
is always vocal, factual and evidence-based, and he tells us
about the pressures these businesses are under. Some smaller and
medium businesses were being charged thousands of pounds for
electricity and severely struggling to pay their gas and oil
bills. This is ultimately not sustainable—it was not for some of
them, and unfortunately they had to close or sell on to new
management.
I replicate what the hon. Member for North Devon has said, and
other Members will do likewise. Although we represent different
parts of this great United Kingdom of Great Britain and Northern
Ireland, we are probably seeing the same issue. When we look to
the Minister for a response, we do so from the basis of facts on
the ground and what people are telling us. There is certainly a
call for Government to better support local businesses,
especially in the coastal constituencies that we all
represent.
Government incentives for more local businesses that want to
choose to open are crucial to sustain the livelihoods of these
areas. Over the last few years—the last two in particular—I have
seen quite a few smaller hospitality businesses, shops and venues
in my area close; it is important that we keep what we have and
that those opportunities are in place. The Government must do
more to support local businesses, especially through the Barnett
consequentials and the block grant. That is my request to the
Minister.
The Northern Ireland Affairs Committee heard from the Secretary
of State this week. To be fair, I think he clearly understands
that the Barnett consequential for Northern Ireland has not been
okay for the last few years, and because of that the Government
are committed to a change in the Barnett formula to something
more along the lines of the Welsh model. That is where we think
we should be, because it would reflect better our population
growth—which has jumped up to 1.95 million, whereas it was
approximately 1.75 million about 10 years ago—and the
peculiarities of costs for Northern Ireland. I am very encouraged
by the Secretary of State for Northern Ireland and by the
Government’s dedication to making those changes. Although the
Secretary of State had outlined a timescale, he did say in answer
to my question in the Select Committee that the Government were
looking very much at how they could make the process quicker.
That would bring substantial moneys in and give equality to the
Barnett consequential.
I would greatly appreciate it if the Minister would look at the
matter and discuss it with the Secretary of State for Northern
Ireland—there is a commitment and I think an agreement can be
reached—to see whether any more can be done to support local
businesses in coastal areas, including in my constituency,
because they need help. I am very pleased, as I think most people
are, to have the Northern Ireland Assembly back, because it
ultimately ensures accountability in the process, but for us to
do well and deliver for our constituents—as a very much integral
part of the United Kingdom of Great Britain and Northern
Ireland—we need to have that Barnett consequential change, which
will enable us to support our businesses across the whole of
Northern Ireland.
1.54pm
(Hastings and Rye)
(Con)
It is a pleasure to serve under your chairship, Mrs Cummins. I
congratulate my hon. Friend the Member for North Devon () on securing today’s
debate.
It is important to acknowledge the Government’s work following
covid-19 to support and rebuild our tourism and hospitality
sector, with reductions in VAT and business rates, the job
retention scheme, business grants, and support for coastal
communities with the recent news that holiday lets will be
controlled this summer through a registration scheme and a
planning permission requirement. I am delighted that the
Government have taken that step, which is something I have raised
directly with Ministers, think-tanks and through the APPG for
coastal communities.
Despite all that support, coastal communities have significant
underfunding challenges. My beautiful constituency of Hastings
and Rye is a tourist hub, in 1066 Country. Based on the most
recent figures for 1066 Country, tourism supports more than
12,600 jobs locally, with an estimated turnover of £550 million
per year. However, like many other coastal communities, there is
a lack of specific and targeted fiscal support.
Tourism has long been overlooked as an industry. I am delighted
that the Minister was previously a tourism Minister, so has a
great understanding of the industry. It is often described as a
Cinderella industry, but is vital to the UK’s economic growth.
UK-wide, tourism is recognised as an important part of rural and
coastal economies and has huge potential for growth, particularly
in the more deprived rural areas and coastal towns and villages,
where there is untapped potential to generate tourism-related
economic growth and employment.
Essential infrastructure, such as roads, public spaces and
facilities catering to tourists, often suffers from neglect due
to insufficient financial support. It is imperative that the
Government prioritise strategic investment. It is great to see
levelling-up funding going into many coastal areas, with Hastings
and Rother receiving in total £80 million over the next few
years. The tourism sector cannot thrive in this country without
sufficient fiscal support. By investing in the upkeep and
promotion of coastal areas, often by providing seed funding to
leverage in private-sector investment, the Government can ensure
the long-term sustainability of both the tourism sector and the
unique identity of these areas.
Many businesses have felt the effect of the national minimum wage
increases. That could be mitigated by temporary cuts to the lower
rate of employment national insurance contributions to 10%,
and/or an increase to the lower threshold. Additionally,
permanently reducing the rate of VAT to 12.5% for hospitality
businesses, as my hon. Friend the Member for North Devon said,
would help them to recover and thrive without having to reduce
employment or increase prices.
The Pragmatix report, “Communities on the Edge”, into which the
APPG for coastal communities that I chair had significant input,
made a number of recommendations to support the visitor economy,
such as improving seasonal workers visa schemes for temporary
hospitality workers and supporting the initiation of business
mentorships for small coastal enterprises to share best practice
and help with the digital transition. I encourage relevant
Ministers to look at that report.
The hospitality and service industries sustained by the tourism
sector are particularly crucial for the livelihoods of coastal
residents. I thank all the hospitality and service workers and
businesses in Hastings and Rye for their dedication and amazing
hard work. Supporting tourism in coastal communities is not just
an investment in the local economy: it is an investment in our
residents. We have amazing hospitality businesses—I cannot go
through them all because they are all so incredible. There are
cafes, restaurants, pubs—so many things. I invite Members to come
and see for themselves: Hastings and Rye is a fantastic place to
visit.
Due to the seasonality of tourism in the UK, it is vital that the
hospitality and tourism sector is properly supported through a
replacement for the coastal communities fund for projects that
specially tackled that issue. I emphasise that point: we need
specific policy funding and a strategic plan for our coastal
communities. Coastal communities need increased fiscal support,
especially in the summer months, to combat the impact of
seasonality, manage waste issues and over-congestion and provide
a larger police presence due to antisocial behaviour in tourist
hotspots such as Camber Sands, which on hot summer days might get
25,000 visitors coming at once. We therefore need a fairer
funding formula for local authorities, the police and other
public sector services. It is essential that we do not leave any
of our coastal communities behind due to poor fiscal investment:
we must prioritise them.
2.00pm
(Orkney and Shetland)
(LD)
It is a pleasure to serve with you in the Chair, Ms Cummins. I
congratulate the hon. Member for North Devon () on securing this debate. By
accident or design, Members have spoken about a range of
communities although there have been a number of common
threads.
I first remind the House of my entry in the Register of Members’
Financial Interests: I am a partner in the firm that runs my
family farm, which also includes holiday let accommodation. In
many ways, that is a living example of the changes and
opportunities that the visitor economy brings to communities such
as mine in Orkney and Shetland, and doubtless to those in other
coastal and island communities around the country.
Tourism is of enormous importance to communities such as ours. I
listened with interest, as always, to the hon. Member for
Strangford (), who described the ripple effect of dropping a stone
in the water. The stone in this case is the visitor economy. The
benefits come very obviously to those who operate the hotels, the
bed and breakfasts and the self-catering accommodation, and they
go out to those who are able to work part time as self-employed
tour guides, for example, and those who have jobs servicing that
accommodation—they go out and out. Tourism may be a useful add-on
to a conventional business. The hon. Gentleman said that a number
of farm businesses in rural and coastal communities have some
sort of tourism add-on—perhaps seasonal. At the end of the day,
it is what they can show to their accountant at the end of the
year that matters.
The way in which our rural and island coastal communities have
got up and done things for themselves is an inspiring story. The
real beauty of it is that, by and large, these are the
self-employed or small businesses—medium-sized enterprises at
most—and the money they earn and pay out stays in the
communities. It goes into local shops and post offices. It allows
families to live in those areas, because their children can go to
local schools. We can keep local doctors, services and banks; the
story continues. There is no single silver bullet for these
economies, but tourism is an important part that makes the whole
thing more feasible.
There are a number of significant challenges. They are not,
strictly speaking, fiscal, but they are significant, given the
way that they hold back island communities. In Scotland, we have
an ageing ferry fleet. For island communities, that has been
problematic for the past few years, and sadly it is only getting
worse. The availability of labour in the local community causes
real difficulty, especially in a seasonal economy. People moving
into work in island communities need accommodation at a time when
people are coming to stay in the same accommodation, so housing
availability in our island and coastal communities is a
significant issue, and Government-led—public sector —provision
could make a real difference to businesses’ ability to grow.
The regulatory burden unfortunately seems to get greater every
year. In Scotland, we now have the short-term let licensing
scheme. It will be interesting to contrast how that works with
the way in which things are now being done south of the border
through a planning mechanism. I have not yet seen figures for it,
but my sense is that we may see, especially in the smaller outer
isles in Orkney and Shetland, a lot of people walking away from
the provision of bed and breakfasts or self- catering
accommodation as a consequence of the licensing regime. It is
expensive for people to comply with, especially if they are away
from the centre of the population. Goodness knows it is difficult
enough for someone operating a business in Kirkwall and Lerwick
to get work done, but if they are operating in one of the outer
isles—in Sanday, Stronsay or North Ronaldsay, or perhaps in Unst,
Yell or Fetlar in Shetland—that becomes yet another extra burden
and cost. The farther the accommodation is from the centre,
inevitably the fewer weeks in the year it can be let and the
fewer people coming to stay in the community. Again, at the end
of the day, is it worth it? The balance is sadly tipping in the
opposite direction, towards saying no.
Those are some of the challenges, but at the end of the day,
these people are self-starting and entrepreneurial and do a lot
to bring economic growth to their communities, and there are
certain levers that the Treasury could use to help them grow
their businesses. The difference between the fiscal levers we can
pull and the other grant-aided incentives and opportunities is
that fiscal levers give people more opportunity to decide what is
best for them and their business, rather than having to design
their business to conform with the various requirements of a
grant application or discount scheme.
There is a real opportunity for the Government to add value and
opportunity to tourism and visitor-economy businesses in our
island and coastal communities. The single most important change
I hear advocated by those businesses, time and again, is the one
touched on by the hon. Member for North Devon ()—the reduction in value
added tax. It is rare in any sector that we hear such consistency
in message. We have seen a small example of that already with the
reduction to 5% during the covid pandemic. It would be
interesting to know what analysis the Treasury has done of the
tax take in that time—albeit everybody was operating in a
much-reduced market.
I come back to my experience from my time in government, when we
reduced the duty on spirits. We did so—for only the second time
in history, I think—in the expectation of a significant cut in
revenue. In fact it produced a significant increase in revenue to
the Treasury. I cannot remember the exact figures of the tax
take, but I think we expected a £600 million decrease and
actually got a £800 million increase. That shows what is possible
sometimes when we reduce the burden on industry and business and
allow them the opportunity to use that extra cash to grow their
business. I strongly suspect—indeed, significant research has
been done on this by some of the big consultancies; Ernst and
Young springs most readily to mind—that the same would be
possible for the visitor economy in our island and coastal
communities. That being the case, at a time when we want to grow
the economy and are relying on that to spread the benefits of
growth throughout the country instead of hoarding them here in
London, surely that is something that must commend itself to the
Government.
2.09pm
(Waveney) (Con)
It is a pleasure to serve with you in the Chair, Mrs Cummins. I
congratulate my hon. Friend the Member for North Devon () on securing the debate and
thank the Backbench Business Committee for granting it. Tourism
around the British coast remains a vital component part of the UK
economy. That is perhaps overlooked at times, and it is right
that we are holding this debate in advance of the spring Budget
statement at the beginning of March. At the end of March we have
the start of the season, with the Easter weekend.
I shall start as other colleagues have, by providing an
advertorial for the tourism and hospitality industry in the
Lowestoft and Waveney area. Some might find that a bit of a joke
or tedious, but it serves a very important purpose. We are
showcasing the enormous range of leisure and tourism
opportunities available on the coast of all four nations, as well
as the beauty and diversity of the coastline. There is something
for everyone to savour, as well as many job opportunities.
I return to Lowestoft and Waveney. In Lowestoft, to the north at
Corton and to the south at Pakefield and Kessingland, there are a
wide variety of beaches, including the gloriously sandy South
beach in Lowestoft. We have two piers—the Claremont pier, which
the Llewellyn family are restoring to its former glory, and the
South pier, which is let for a peppercorn by Associated British
Ports to a community interest company, which I chair. To the
north and south of Lowestoft we have two of the biggest visitor
attractions in East Anglia, the Pleasurewood Hills theme park and
Africa Alive, which is run by the Zoological Society of East
Anglia.
All along the coast are a variety of holiday parks run by family
businesses and larger national companies. We are also the
gateway, at Oulton broad and Beccles, to the—often overlooked by
our noisy neighbours in Norfolk—Suffolk broads, which are
surrounded by a stunning landscape that the Suffolk Wildlife
Trust plays an increasingly important role in restoring at
Carlton marshes, Oulton marshes and, as announced last week,
Worlingham marshes. Finally, Hoseasons, which takes the strain
for many of us out of organising and arranging our holidays, has
been based in Oulton broad and Lowestoft for nearly 80 years. I
hope that I have painted a picture highlighting the importance of
coastal tourism in the Waveney area.
Covid hit local businesses hard, although the support that the
Government provided was a lifeline for many. The pandemic, as we
are hearing, unfortunately has a long, bitter tail, and for many
the 2023 summer season was worse than that of 2022. Looking
forward to the forthcoming season, many businesses’ confidence is
low. High energy costs continue to have an impact. The response
to those challenges by many businesses and operators is to cut
their opening hours, delay investment and reduce staff.
One business has highlighted to me the negative impact—described
by hon. Members around the Chamber —of the national minimum wage.
That business does not begrudge paying the increase to its staff,
but that presents challenges that cascade right through the
business and ultimately leads to higher charges to customers, at
a time when their wallets are under enormous strain.
A holiday park operator has brought to my attention the delays in
obtaining planning permission for an upgrade and extension to its
facilities, not in the Waveney area but elsewhere on the East
Anglia coast. An application that should have taken eight weeks
took one and a half years.
Leisure businesses in coastal areas including those of Suffolk
are not asking for handouts, but they rightly seek a level
playing field. To achieve that, I should be grateful if my hon.
Friend the Minister would consider the following fiscal
measures—I am largely repeating others’ words, but in this place
repetition plays a very important role indeed. First, as
UKHospitality seeks, we must cap the increase to business rates
for larger premises at 3%. Ultimately, we must have annual
revaluations and drive the rate in the pound back down to the 30p
to 35p level, which is what we had when business rates were
introduced in the early ’90s. That said, in the short term,
hospitality and leisure businesses, many of which are what I
would describe as property-hungry but relatively low
income-generating, should not have to pay onerously high business
rates.
Secondly, to address the challenge of funding the increase in the
national minimum wage, in his forthcoming Budget the Chancellor
should cut to 10% the lower rate of employer national insurance
contributions and increase the thresholds. The benefit of this
policy, which in many ways is welcome, would thereby be shared
not only with businesses, but with the Government. That is only
equitable.
Thirdly, to ensure that planning applications of the type that I
have mentioned are promptly dealt with and are not a brake on
investment, the fair funding review of the local government
funding settlement needs to be carried out as quickly as
possible. That funding settlement is skewed against county and
coastal councils.
I ask the Minister to act as a messenger—not Cupid, perhaps—to
other Departments about other things that coastal businesses in
coastal communities need not only to survive, but ultimately to
thrive.
The first message is to the Department for Environment, Food and
Rural Affairs. Along the Suffolk and Norfolk coast, we need
urgent investment in coastal defences. Our glorious beaches are
increasingly unsafe, and holiday park operators and other
businesses will not invest in facilities if they are at increased
risk of disappearing over a cliff or being washed away. There
should also be national investment in the co-ordination and
promotion of the King Charles III England coast path national
trail.
The message to the Department for Culture, Media and Sport is
that VisitBritain and VisitEngland should provide parity of
support for coastal and rural economies with what is given to
London and other core cities.
The message to the Department for Levelling Up, Housing and
Communities is that we need to revive the coastal communities
fund and separate the funding provided by the Crown Estate from
the granting of licences for offshore wind farms. That money
derives from our coastal waters. It should be used to address the
many challenges that coastal communities face, rather than thinly
dispersed across the whole country.
The final message goes back to DEFRA. Although progress is being
made on improving the quality of bathing water around the coast,
further pressure must be applied to the water companies to
completely eliminate storm overflows as quickly as possible.
Coastal Britain is utterly unique. We must cherish it and ensure
that the tourism and hospitality businesses operating there have
every opportunity, first to survive and then to flourish and
bring significant benefits to the people who live all around our
coast.
2.19pm
(Coatbridge, Chryston and
Bellshill) (SNP)
It is a pleasure to see you in the Chair, Mrs Cummins. I thank
the hon. Member for North Devon () for securing this debate.
It is always a pleasure to come to Westminster Hall and give the
Scottish National party perspective.
The hospital sector across coastal and rural communities has
weathered relentless storms of financial hardship over the past
few years. Surely the UK Government must now extend a helping
hand via Barnett to businesses across the hospitality sector,
because it is so important to the long-term success of our rural
communities and remote areas, and to halting the continued
closure of hospitality venues to which we have all become
accustomed throughout our constituencies.
From the economic fallout of Brexit to the devastating impact of
the pandemic, compounded by energy price shocks and inflationary
spikes, our pubs, restaurants and cafés have been fighting an
uphill battle for their very survival. The multifaceted
challenges that they are confronting have been unprecedented. As
a result, between March 2020 and the end of 2022, a staggering
10% of UK hospitality businesses closed their doors permanently.
In Scotland alone, more than 500 pubs and breweries closed in
2023, and the struggle persists for many more. Many of them cite
rising energy costs: nine out of 10 hospitality businesses now
face far higher energy and supplier costs.
The negative impacts of Brexit on rural and coastal communities
are never hard to find these days. The compounding effects of
border controls on fresh food and flowers to and from the
European Union further exacerbate the situation, burdening
Scottish hospitality with over £500 million in increased costs
and delays annually. Inflation is undoubtedly a key factor in
consumer choices. With the increased energy costs, the picture is
bleak for many in the industry.
As representatives in this Chamber of many diverse and different
communities, we all recognise the part that venues play in local
areas. Pubs and cafés are essential social hubs that foster
community cohesion and combat loneliness. They are places that
connect our communities and bring people together to share life’s
highs and lows. The Scottish hospitality sector is also a massive
employer, accounting for 8% of all workforce jobs, employing more
than 220,000 individuals and contributing £140 billion to the
economy and £54 billion in tax receipts.
Another issue of great concern, particularly in Scotland, is
depopulation in our rural and coastal communities. Experts tell
us that it threatens their very existence. We know that the UK
Government’s legal migration policy does nothing to draw people
into our coastal or rural communities, because the median wage in
a place like the Western Isles in Scotland is £24,000, but
anybody looking to come into the UK will have to earn a lot more
than that, which basically means that huge parts of Scotland will
have no inward migration. That is a real concern for us, which
the Scottish rural visa pilot scheme championed by the Scottish
Government aims to address by attracting workers to key sectors
such as hospitality.
Brexit-induced labour shortages persist, with 72% of hospitality
businesses struggling to fill their vacancies. Across Scotland,
the vast majority of people in the hospitality sector came from
among our friends in the European Union. The UK Government’s
reluctance to heed the calls for special visa arrangements
exacerbates the issue and is imperilling the Scottish economy
further. The SNP has consistently advocated for fiscal measures
to be enacted to alleviate the strain on the sector. As we have
heard today, VAT reductions, particularly for hospitality and
tourism, could provide much-needed relief; I hope the Minister
has heard that from all sides today. Additionally, slashing beer
duties could stimulate job creation, benefiting businesses and
individuals.
The Scottish Government have implemented measures such as the
100% relief for island hospitality businesses, but broader
support is still very necessary. The small business bonus scheme
and the generous rates relief exemplify the commitment to support
businesses and communities across Scotland. The Conservatives’
proposed tax cuts for the wealthy diverge wildly from the
public’s preference for prioritising public services, as a recent
YouGov poll evidences.
We must ensure that the upcoming spring Budget allocates
resources where they are needed most, supporting this vital
sector and safeguarding our rural and coastal communities across
Scotland. If the Government here in Westminster do not want to
stand up for and stand with our hospitality industry, ensuring
its resilience and longevity for generations to come, the very
least they can do is give Scotland full fiscal powers so we can
do the job that they are not doing.
2.25pm
(Ealing North) (Lab/Co-op)
It is a pleasure to see you in the Chair, Mrs Cummins. I
congratulate the hon. Member for North Devon () on securing this debate on
fiscal support for the tourism and hospitality industries in
coastal areas. I put it on the record that, like her, I have
benefited greatly from my conversations with Kate Nicholls at UK
Hospitality.
I am pleased to respond to the debate on behalf of the
Opposition. Hon. Members have spoken passionately about the
importance of hospitality and tourism, the jobs they bring to
local economies, the vitality they bring to our local areas and
the enjoyment they bring to all our lives. As we have heard, the
tourism and hospitality industries have been hit by a series of
challenges, from covid to the cost of living crisis. The
Opposition are clear that hospitality and tourism are vital to
the UK economy and need a Government who are ready and able to
help them thrive.
In 2019, the economic output of tourism-related industries was
estimated at £134 billion, of which £74 billion was estimated to
be generated directly by tourism. Those figures are respectively
equivalent to 6.6% and 3.6% of the whole economy. Additionally,
as I mentioned in a Westminster Hall debate a few weeks ago, on
fiscal support for the hospitality sector hospitality provides 3%
of the UK’s economic output, and billions in tax revenues for the
Treasury.
Hospitality and tourism are important industries for communities
across the country. As we have heard from the hon. Member for
North Devon and others, they are especially critical to coastal
areas. Coastal communities are particularly reliant on tourism
and hospitality for employment and income. When the economy is
not working as it should, those communities are more likely to
suffer deprivation and unemployment. VisitBritain data shows that
10% of inbound tourists in 2019 visited England’s coasts and
beaches, and those most likely to journey to the coast were on
visits lasting a week or longer. That figure is higher in Wales,
Scotland and the south-west of England. Such trips are vital to
people’s livelihoods right across the UK.
In my west London constituency, we have no coasts that I can
praise in this debate. But may I put it on record that when I
occasionally leave Ealing North, I enjoy visiting coastal areas
across the country, including Oban on the west coast of Scotland
and Saltburn, Whitby and Staithes in North Yorkshire, and
visiting my family on the south coast of England from Brighton to
Fareham and Littlehampton?
Many hospitality and tourism businesses in coastal communities
are finding it harder and harder to succeed, with high inflation,
rising rents and the burden of business rates. At the same time,
their customers find that they have less money to spend on
enjoying what seaside hotels, pubs, cafés, restaurants and so on
have to offer, as people have seen their wages flatlining while
taxes and the cost of living climb relentlessly. Today’s debate
is rightly an opportunity to recognise the central role of
hospitality and tourism in British life, but it is also an
opportunity to make it clear that those industries need a
Government who will support them to thrive.
Labour will revitalise the hospitality and tourism industries. We
will help coastal communities to get back on their feet after 14
years under the Conservatives. It is clear that the antiquated
system of business rates is doing the industries no favours. As I
set out in the debate on fiscal support for the hospitality
sector a few weeks ago, hospitality and tourism businesses in
coastal areas may have had hope when they heard the Government’s
promise of a fundamental review of the business rates system in
their 2019 manifesto. However, that review never materialised,
and trade groups representing consumer-facing businesses have
expressed their dismay at the Government’s inaction on that
promise. In March last year, the Federation of Small Businesses
responded to what the Government were doing on business rates by
saying that
“the 2019 Manifesto commitment to hold a fundamental downward
review of business rates has not happened…these changes do not
amount to the fundamental overhaul the system needs, to reduce
the chilling impact of a regressive tax that you pay before even
earning a penny in turnover, let alone profit.”
We will not stand by while businesses struggle from year to year,
facing uncertainty. As the shadow Chancellor, my right hon.
Friend the Member for Leeds West (), has set out, if Labour were
in Government we would scrap and replace business rates, shifting
the burden away from hospitality and retail businesses, which
continue to shoulder a heavy burden compared with those operating
primarily in the digital economy.
Our new system would incentivise investment, promote
entrepreneurship and reward businesses that move into empty
premises. It would help the hospitality and tourism industries
once again to thrive. Our plan to revitalise Britain’s tourism
and hospitality industries is clear, so in advance of the spring
Budget, I would be grateful if the Minister explained what
representations he or the Government have taken from businesses
in coastal communities, and what measures they are considering
offering to address the points that hon. Members have set out
today.
I am sure that many people across coastal towns will be
interested to hear the Minister’s response, but whatever he says,
we know that last week’s news about the economy being in
recession will further have added to the sense of gloom facing
hospitality and tourism in coastal areas, and indeed businesses
in every sector in every region and nation of the UK. That is why
our plan to get the economy growing is so important, to make sure
that the tourism and hospitality industries in our coastal
communities can thrive once again.
2.31pm
The Financial Secretary to the Treasury ()
Let me join others in thanking the Backbench Business Committee
for granting this debate, and congratulating my hon. Friend the
Member for North Devon () on securing it. As she
referred to in her speech, she is indeed a persistent and
persuasive advocate not only for her own constituents and
constituency, but for the vital tourism, hospitality and leisure
sector. I thank everybody for their contributions today; we have
heard many good arguments, showing right across all four nations
the passion, enthusiasm, empathy, love and support for this vital
sector that employs so many of our constituents directly, and
even more indirectly.
The Government are committed to promoting economic growth in all
parts of the UK, and in order to do so we recognise the unique
challenges faced by coastal communities, as raised by many
Members today. We have supported coastal communities to level up
through the dedicated funding under the coastal communities fund,
while the levelling-up fund has provided more than £1 billion to
projects in coastal areas. That was raised by my right hon.
Friend the Member for Witham (), my hon. Friend the Member for
Hastings and Rye () and others. More than £400
million has been provided from the UK shared prosperity fund,
which will go to lead local authorities within or serving coastal
areas.
The long-term plan for towns also targets more than £1 billion of
support for towns up and down the country, including coastal
towns, each of which will get about £20 million over the next
decade. This is built on the support offered through successful
bids into town deals and the future high streets fund. It is
important to mention that of the 101 towns receiving a town deal,
22 are coastal and are set to receive more than half a billion
pounds alongside almost £150 million from the future high streets
fund. Therefore, directly or indirectly, the tourism, hospitality
and leisure sectors will rightly benefit from some of this
additional investment. Every Member has outlined today how the
sector makes such a significant contribution to the UK economy as
a whole, and to coastal areas in particular.
Let us not forget that the sector particularly suffered from the
pandemic and is still recovering. Since the start of the
pandemic, we have provided more than £37 billion for the tourism,
hospitality and leisure sectors in the form of grants, loans and
tax breaks. I think the hon. Member for North Devon mentioned
some of those loans that are still being repaid. She was right to
point out that they are still a burden on many businesses, but
she will be aware that we have introduced considerable
flexibility in those loans, extending the time to pay some of
them from six to 10 years, and other measures. We are aware of
the challenges. There is still a lot of debt to be paid off by
individual companies, but also by the nation as a whole, because
about £350 billion of support in total was provided to support
individuals and the economy during the pandemic. That needs to be
paid off, and everybody is sensible and aware that that will not
be easy. It is why tax levels are as they are at the moment.
Of course, over the 2021 spending review period, the Government
also allocated over £100 million to support the British Tourist
Authority, which of course supports VisitBritain and
VisitEngland, whose important work was mentioned by my hon.
Friend the Member for Waveney (); he also raised the point
about where they spend their money, which is something that my
colleagues at the Department of Culture, Media and Sport maintain
a focus on. I applaud the work done by those bodies and by
VisitScotland, Visit Wales, and the equivalents for Ireland and
Northern Ireland. They do incredibly valuable work and attract
not only domestic visitors but visitors in their millions from
around the world, who come and enjoy everything that we have to
offer.
Many Members have mentioned business rates. I have been lobbied
by the ever-busy Kate Nicholls from UKHospitality; it sounds like
she has been around quite a lot recently—and rightly so, because
she represents such an important sector and so many people across
the country. We have heard what those people have had to say and
many Members have today re-emphasised the points that the
industry bodies are making; UKHospitality is one of many industry
bodies that are incredibly powerful and persuasive.
In the autumn statement, we announced tax cuts for the sector
worth about £4.3 billion over five years. As has been mentioned
by several Members, we also extended the retail and hospitality
leisure relief scheme on business rates to 75%, creating a tax
cut worth almost £2.4 billion for about 230,000 retail
hospitality and leisure properties, which of course helps our
high streets and protects small shops, many of which are in our
coastal communities.
Of course, that relief was not extended by our colleagues in
Scotland, nor fully extended in Wales. I assure hon. Members that
we keep an eye on what is happening in other parts of the country
and we share ideas. The sector is not particularly party
political, as I know from my tourism role; tourism Ministers and
others meet regularly across the nations, and work together and
share ideas. In these difficult financial times there is not
always the money to go around to do all the things that we would
like to do, but we prioritised retail, hospitality and leisure
for that specific additional relief in England.
The UK Government also decided to freeze the small business
multiplier for the fourth consecutive year in 2024-25. That will
protect over 1 million ratepayers and, combined with small
business rates relief, will protect 90% of properties from
inflationary bill increases. It will have a significant impact.
For example, the typical pub will receive £11,800 of RHL relief
off their final business rates bill in 2024-25; and, combined
with the frozen small business multiplier, will benefit from
about £12,800 of support.
Many Members also mentioned the registration threshold, which we
have also received quite a lot of lobbying on. Of course, the
Government recognise that accounting for that threshold can be
burdensome on small businesses. That is why the UK has the second
highest VAT threshold, at £85,000, within the OECD—keeping the
majority of UK businesses out of VAT all together. I recognise
that views on the VAT registration threshold are divided and the
case for change has been reviewed regularly over the years. There
was a review just a few years ago. No clear option for reform
emerged from that review, but, as with all tax policy, we will
continue to keep this policy under review. I am afraid that that
might be a point I make several times in my concluding
comments.
Quite importantly, several Members also raised the issue of
cutting national insurance. As part of our long-term plan for
growth and to ensure that work pays, we have cut taxes for 29
million working people. From last month, 27 million employees
have had their national insurance contributions, or NICs, cut
from 12% to 10%. That means that the average worker on £35,400
will receive an annual tax cut of more than £450 a year. Of
course, the self-employed will have a tax cut and that benefit
will come in from April. That comes on top of the existing £5,000
employment allowance, which means that about 40% of all
businesses—around 675,000 in total—have been taken out of paying
employer NICs entirely. My hon. Friend the Member for North Devon
and I have spoken about that on many occasions. I heard the many
calls for further reform of and further movement on national
insurance contributions, but in advance of a fiscal statement, I
am afraid that the Chancellor would not be impressed if I
announced policy today. Nevertheless, all these issues are being
looked at.
Hon. Members mentioned a few other issues. The hon. Member for
Strangford () always makes important contributions, but from my
multiple roles over many years, I know that the tourism,
hospitality and leisure sector is a particular passion of his. I
will finally take him up on his invitation to visit his
constituency; my goal is to sort that out, so let’s talk dates
very soon. As usual, he brought up something that other people do
not. He reminded us that, although we can control certain things
and pull certain levers, the all-important thing for the tourism,
hospitality and leisure sector is the weather, which plays a
vital role—sometimes boom or bust.
My hon. Friend the Member for Waveney pointed out the incredible
diversity of offerings in the United Kingdom, so it is important
to remember that at all times of year, in all weathers, there is
something compelling to visit. We need to get that message across
domestically and internationally through marketing.
The hon. Member for Strangford mentioned our heritage and the
role played by the National Trust and many others in the
ecosystem. I am more than happy to have conversations with other
colleagues about his points about Barnett consequentials and the
block grant, and I know he is having those conversations too. I
will make sure they hear what he said today and his contributions
in other areas.
My hon. Friend the Member for Hastings and Rye mentioned the
importance of seasonality, which is related to the weather, and
what we can do to reduce it. That is a particularly acute issue
for the UK tourism industry, and it of course impacts
productivity over the course of the year. She also mentioned
planning policy and the important changes recently announced by
DLUHC in response to its consultation with DCMS. The sector has
been calling for a registration scheme for some time, and we hope
it will have the desired impact.
The right hon. Member for Orkney and Shetland (Mr Carmichael)
also talked about planning policy in different parts of the UK
and about different regimes. He is an extremely knowledgeable
advocate for the sector, and rightly pointed out that the
multiplier impact is key. There is obviously a direct impact, but
sometimes the indirect impacts are difficult to assess. He
mentioned the VAT cut during the pandemic. We estimate that that
cost the Treasury about £8 billion, but of course that was
needed; it was a very difficult time. It was always intended to
be temporary, although we are hearing many calls for a further
reduction in VAT. That figure alone shows that it would not come
without considerable cost, which needs to be factored in, but we
recognise that there is a multiplier impact.
If we were to repeat that reduction, the cost would probably be
£10 billion or £12 billion. Some are lobbying for a smaller rate
cut to about 12.5%, which would have a smaller cost, but we are
still talking about a loss of billions of pounds of revenue to
the Treasury. As with all requests for a VAT cut, we need to know
what the purpose is, what the impact will be and whether we can
be confident that the lower prices will be passed on to the end
consumer. That is usually the purpose of VAT cuts, in contrast
with help with cash flow through other mechanisms such as
business rates relief. The right hon. Gentleman was absolutely
right to point out that, in this sector, pulling one lever can
have a positive impact across a very wide area indeed.
My hon. Friend the Member for Waveney was right to showcase his
constituency and others, because we have so much to offer. He
unsurprisingly had a very broad range of asks and requests, which
I will pass on to the relevant Departments. I assure him that we
do talk across Departments, so I have had conversations with
colleagues about many of the points he raised and other issues,
because no one Department has oversight or control over the
sector. As we have found in this broad-ranging debate, many
Ministers and many Departments have some control over certain
levers, but we talk to each other.
My hon. Friend also mentioned Hoseasons in his constituency. I
should declare that I have visited on many occasions, because it
was a client of mine many years ago. As some may know, I worked
in the sector before coming into Parliament. I always enjoyed my
visits to Lowestoft and the area—it was always sunny.
I am coming to an end, Mrs Cummins; I know that the debate could
go on for three hours, but I will ensure that we do not. I am in
agreement with many of the points made by my SNP and Labour
opposite numbers—the hon. Members for Coatbridge, Chryston and
Bellshill () and for Ealing North
() respectively—because of the
nature of the sector. In some other areas, I am in slight,
respectful disagreement with them, but that should not detract
from the fact that this sector has all-party support.
We may have differences of view on what levers to pull, but the
sector has support across the whole House, so I conclude by
saying that I very much appreciate all the contributions made
today by right hon. and hon. Members—many substantial
contributions, some compelling arguments and some very good
ideas. In advance of a fiscal event, I cannot make any
announcements or commitments, but I want to make it clear that we
are always listening.
2.45pm
Thank you, Mrs Cummins, for your chairmanship. I thank all right
hon. and hon. Members for their contributions and the Minister
for his response.
It is always my pleasure to be the one-woman tourist board for
North Devon for the afternoon. On a slightly more serious note,
part of the reason for the debate has been highlighted by so many
other colleagues: coastal communities often hide severe
deprivation behind the phenomenal tourist businesses that we are
all talking about today. Unfortunately, Ilfracombe in my
constituency is no exception to that rule. I take this
opportunity to put in one final pitch to the Minister. Yes, we
have levelled up across the country at large, but small coastal
communities such as Ilfracombe, with a population of just 12,000,
have missed out on multiple pots of money, and yet it is the
third most deprived town in the country. There is more that we
could do for these small areas, which is why this debate was so
vital—tourism and hospitality is the No. 1 part of their
economies. It is vital that we get that right for those
communities. Meanwhile, I will continue to fight for more funding
for coastal communities from other pots of money.
Again, I thank hon. Members. The draw of the sea and of the pub
is now upon us.
Question put and agreed to.
Resolved,
That this House has considered fiscal support for tourism and
hospitality in coastal areas.
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