Hospitality Sector

Angus MacDonald Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sarah Olney]

I thank the right hon. Gentleman for his intervention, but I entirely disagree with him about the banter ban. The Liberal Democrats agree with the concerns expressed in the motion about the challenges facing the hospitality sector, but we do not agree with the part of the motion that expresses regret about measures in the Employment Rights Bill on workplace harassment, which we do not believe have been accurately represented. As is clear from what has been said by my hon. Friend the Member for Torbay (Steve Darling) and the significant work done on this issue by my hon. Friend the Member for Bath (Wera Hobhouse), we welcome the introduction of reasonable and workable measures to protect employees from harassment in their place of work.

The Government must take steps to boost the hospitality workforce, and that includes showing much more urgency in introducing a youth mobility scheme. It took nearly a year for them to listen to calls from the Liberal Democrats and others for the negotiation of a youth mobility system, and I hope that Ministers will not continue to drag their feet on an agreement that will truly benefit the hospitality sector. Changes implemented in April 2024 that increased the minimum salary threshold for skilled worker visas shrank the talent pool from which businesses can recruit, contributing to greater staff shortages, and in a 2024 survey of nearly 1,700 employers from a range of sectors, including hospitality, almost 40% of employers with hard-to-fill vacancies said that a reduction in the availability of overseas talent was one of the main causes of staffing issues. At a time when so many businesses are considering whether they can remain viable, we must give hospitality businesses the tools they need to grow and help boost the wider economy, and access to global talent is part of that. I therefore ask the Minister once again whether the Government will finally set out a timeline for the introduction of a youth mobility scheme.

We also need serious action from the Government on boosting the domestic workforce by supercharging apprenticeships and investing in skills and retraining opportunities. Can the Minister assure the House that Skills England will function as a properly independent body, with employee rights at its heart?

Businesses across the country continue to struggle with sky-high energy costs, and I recognise that the recent industrial strategy provided some welcome measures on that front, particularly for the manufacturing sector, but as the motion points out, there was very little in the strategy to help support hospitality firms with their soaring energy bills. Liberal Democrats have long campaigned for energy market reform, which would include reducing our reliance on expensive fossil fuel imports by investing in home-grown renewable energy. In recent months we have set out a plan to cut energy bills by half within 10 years by breaking the link between gas prices and electricity costs, so that households and businesses can see the benefits of cheap, clean power in lower energy bills.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

May I intervene, please?

[Sarah Olney]

Yes.

[Mr MacDonald]

It is difficult to get a word in. [Laughter.] I am married; I know about these things.

I have 100 staff members in the hospitality industry in the highlands, and I can say that all is not well in hospitality by any means. Those who are not on mains gas are paying for electricity, by and large, and we are paying four times as much for energy as people in the city. Moreover, we in Scotland do not receive the same business rates relief as the rest of the UK. [Interruption.] I thank my Scottish National party friends, who are sitting next to me. Our staffing costs, including employers’ national insurance contributions, have increased by 12.4%. So we have real problems, and I must say to the Minister that all is not well.

[Sarah Olney]

Well, I think I thank my hon. Friend for his intervention. He is, of course, absolutely right about the cost of energy and the difficulties that it presents for businesses up and down the country. His point about Scotland in particular is well made. Will the Minister consider the proposals put forward in our plan, which could help to truly ease the burden not just on the hospitality sector, but people across the country?

Finally, I turn to business rates. Today’s motion rightly reflects many of the economic mistakes made by this Government. However, it is important to highlight that it was the last Conservative Government who broke their manifesto promise to reform business rates, leaving small businesses trapped in an outdated and unfair system. Of course, the current Government have also pledged to replace the system, with no action taken thus far. The Liberal Democrats will continue to hold Ministers accountable for their pledge, because there is a need for a fundamental overhaul of the unfair business rates system. It penalises manufacturers when they invest to become more productive and energy efficient; it leaves pubs and restaurants with disproportionally high tax bills; and it puts our high-street businesses at an unfair disadvantage, compared with online retail giants. In too many places, pubs, restaurants and shops are being forced to close, taking with them jobs, opportunities and treasured community spaces.

More broadly, the outdated tax system inhibits business investment, job creation and economic growth, holding back our national economy. These problems have persisted for too long, and it is high time the Government took action. Our proposals for fair reform would cut tax bills, breathe new life into local economies and spur growth. Equally importantly, they would provide long-term certainty for businesses, which in today’s commercial environment is needed more than ever.

The value of our hospitality sector goes beyond economics. Pubs, restaurants and cafés are the beating hearts of our towns; they brighten our high streets and bring our communities together. The economic landscape created by the last Government did so much to damage them, and this Government continue to push many to the brink of collapse. I hope today that Ministers will listen to the Liberal Democrats’ calls and reverse the jobs tax, bring forward plans for business rate reforms, and seriously consider our plans to cut energy bills for people and hospitality firms across the country.

--- Later in debate ---

[Tom Hayes]

The hon. Lady raises an interesting point on behalf of her constituents and businesses. I would, of course, say that were it not for the tax rise that allowed for investment in our NHS, we would not be seeing so many hospital appointments and such dramatic falls in NHS waiting lists, and we would not then be seeing people who were once ill returning to the workforce, so that they can earn, work and contribute to our economy, and then help our hospitality sector.

[Mr Angus MacDonald]

Would the hon. Gentleman admit that what actually happened in the Budget was a transfer of 2% of GDP from the private sector to the public sector? That private sector is, to a significant extent, the hospitality sector.

[Tom Hayes]

I thank the hon. Gentleman for his intervention, although I do not recognise what he is saying. I hope he is welcoming the NHS investment that his constituency is receiving, as well as the free breakfast clubs, place-based nurseries, stimulation of his local economy, improved pothole filling and improved connectivity. If he wishes to stand up and say that, I would be happy to give way to him again.

--- Later in debate ---

[Michael Payne]

I congratulate the Golden Smog on its initiative. I look forward to having a pint there with my hon. Friend next time I am in his constituency.

Gedling has nearly 3,000 businesses, 98% of which are small or micro. Retail and hospitality alone support over a quarter of the jobs in my constituency. Those are not just numbers; they represent livelihoods, families and futures. That is why I welcome the Labour Government stepping in where the last Conservative Government left a cliff edge. Instead of pulling the rug out from under small businesses, we are providing a lifeline: a 40% business rate relief, targeted where it is needed most. Labour does not turn its back on small businesses; we back them. More than 10,000 pubs and bars shut under the Conservatives. By contrast, this Labour Government are acting: permanent business rate cuts from 2026; high-street rental auctions; and a ban on unfair rent clauses—real measures to make our high streets revive and thrive.

The Conservative motion mentions “catastrophic choices”, but Conservative Members should take a long, hard look in the mirror. On their watch, inflation peaked at 11.1% in October 2022, and food inflation hit 19% by March 2023. [Interruption.] I can hear chuntering on the Opposition Benches, but those inflation levels did not just hit household budgets; they scarred small businesses in Gedling and across the country.

[Mr Angus MacDonald]

When the hon. Gentleman prepares his agenda for the next small company roundtable, will he ask companies how they are getting on with the 8.7% national insurance increase, and the total employment cost increase of 12.4% as a result of the Budget? That is four times inflation. I think he will be surprised how uncomfortable the answer is.

[Michael Payne]

With the greatest respect to the hon. Gentleman, the businesses did a grand job of telling the Minister their views directly. I do not think that they need any lectures from him on how to run their businesses.

While café, pubs and shops fought to stay open, the Conservatives were too busy fighting among themselves to help small businesses. This Labour Government are turning the page. Through our plan for small and medium-sized businesses, Gedling employers are getting the support that they need to recover, grow and thrive, and we are already seeing the results. The Opposition talk about job losses, but the facts is that employment has risen by more than 625,000, and economic inactivity has fallen by 338,000. That is not rhetoric; it is progress under this Labour Government.

The previous Conservative Government wrecked the economy, left inflation spiralling and turned their back on the high street. In Gedling, the damage is clear for my constituents to see: vacant units on the high street; council cuts that have left our town centres less clean; and, yes, crumbling pavements and roads in and around our high streets. In just over a year, under this Prime Minister and the Under-Secretary of State for Business and Trade, the hon. Member for Harrow West (Gareth Thomas), Labour is turning things around. It is backing small businesses, especially in hospitality; getting people back into work; delivering a new deal for working people; and, yes—although the Conservatives do not like the facts—growing the economy faster than any other G7 nation. That is what we get with a Labour Government, and by gosh, after 14 years of Conservative neglect, it cannot come fast enough for my constituents, and for businesses in Gedling.