Hospitality Sector

Dawn Butler Excerpts

Tuesday 1st July 2025 Westminster Hall

[Mike Wood]

Hospitality, as I have said, is so important in every part of the United Kingdom. We need Governments in every part of the United Kingdom to recognise that and to take the appropriate action, although I hope the hon. Gentleman will excuse me if my focus is primarily on those decisions that can be taken in Westminster and by the Government at a national level.

My challenge to the Minister today is simple: will he listen, if not to me, then to representatives from across the hospitality sector who are clear that the Government are getting this wrong? Will he support a sector that contributes £54 billion in tax receipts— far more than it gets back? Will he stand by his Government’s own missions of fairness, opportunity and growth, or will he continue policies that undermine them at every turn?

Hospitality is being taxed out of existence, and that is a political choice. We need a change of course not just for the sector, but for every community that depends on it. We need policies that reflect the value that hospitality brings—economically, socially and culturally—and we need action now.

[Dawn Butler (in the Chair)]

I remind Members that they should bob if they would like to contribute to the debate. Informally, speech times should be around four minutes.

--- Later in debate ---

[Gareth Thomas]

The hon. Gentleman is right to make his point. One would hope that the Scottish Government would be as committed to taking action as the Government here in the UK. I hope he and other Scottish colleagues will see a change of heart and approach from the Scottish Government.

I understand the sector’s concerns about employers’ national insurance contributions. We are protecting the smallest businesses by increasing the employment allowance to £10,500. That means 865,000 employers will pay no national insurance contributions at all, and more than half of employers will see no change or gain from the package. The majority of hospitality businesses are micro-sized, so many will benefit from the increase.

We are also committed to reducing the regulatory burdens facing the hospitality sector. We recently launched a licensing taskforce to come up with recommendations for cutting red tape and removing barriers to business growth. We have received a report from the licensing taskforce containing many extremely interesting and thoughtful proposals, and we will make an announcement on our response to the taskforce work shortly.

We have also introduced a hospitality support scheme to co-fund projects, aligned with the priorities of the Department for Business and Trade and the Hospitality Sector Council. That includes support initiatives such as Pub is the Hub, to encourage local investment in rural communities—the hon. Member for South Northamptonshire made a point about that. In addition, we are extending the growth guarantee scheme, where Government will help smaller businesses to access loans and other kinds of finance up to £2 million, by covering 70% of the potential losses for lenders.

Later this summer, we will publish our strategy to support SMEs over the long term. The paper will focus on boosting scale-ups across key policy areas, such as creating thriving high streets, making it easier to access finance, opening up overseas and domestic markets, building business capabilities and providing a strong business environment.

The SME strategy will complement the industrial strategy in helping to create the conditions for further economic growth. The industrial strategy will support the whole economy by creating an improved operating environment to create long-term stability and generate greater dynamism for new start-ups to emerge. Supporting industrial strategy sectors will have spillover benefits for the rest of the economy—from innovation pull-through to technology diffusion. As an example, growth in the creative industries will create spillover opportunities for hospitality businesses.

As we look ahead, we will continue to work closely with the hospitality industry to co-create solutions to ensure that we generate growth together. In particular, we will work with the sector to iron out the issues that are of most concern. For example, we understand the current challenges relating to dual-use packaging under the extended producer responsibility scheme. We are therefore working with hospitality businesses to develop exemptions for waste disposed of commercially through the use of agreed evidence to show that that would be highly unlikely to end up in household waste streams.

Also, as we set out our ambitious plan to raise the minimum floor of employment rights, we will strike the right balance between fairness for workers and business investment and growth. Improving employment conditions benefits economic growth. It helps to put more money in employees’ pockets, which will help all businesses, including hospitality businesses, in the long term. We will do this by working in partnership with business, including the hospitality industry, to deliver our plan to make work pay, and we will consult on key proposals such as zero-hours contract reform in the autumn.

We will of course continue to work closely with the Hospitality Sector Council to co-create solutions and achieve growth in collaboration with the industry. That includes identifying regulatory barriers to investment and growth, and addressing skills shortages. We have established Skills England. We are reforming the existing apprenticeship offer into a growth and skills levy that allows more flexibility for both employers and learners wanting to pursue the apprenticeship route. The Department for Education has said that it will explore one of the key asks of the hospitality sector—the idea of foundation apprenticeships for hospitality. We are determined to help the hospitality sector to continue to unlock innovations and improve sustainability, and in that way bring down its costs. We will also look at how the Hospitality Sector Council can help us to deliver on our priorities for wider investment and growth, and support work to reinvigorate our high streets.

We all know that hospitality businesses are fundamental. They are crucial to our economy, crucial to our communities and fundamental to our high streets. And they matter to all of us individually, to our friends and to our families. The Government recognise the role of hospitality in creating places that people want to live, to work and to invest in, and we will continue to work in partnership with the industry to deliver growth and to break down barriers to opportunity.

[Dawn Butler (in the Chair)]

For a two-minute wind-up, I call Mike Wood.