Hospitality Sector VAT: Local Economies, Employment and Growth

George Freeman Excerpts

Thursday 12th November 2026 Westminster Hall

[Chris Webb]

The hon. Gentleman has clearly had a quick glance at what I am coming to next in my speech. I welcome the fact that visitor levy receipts will stay local and will support tourism-related priorities, but businesses in places like mine have understandably raised concerns about the cumulative impact of rising costs. The levy is just one more addition to a growing list. What might work in the centre of Manchester does not work in coastal communities like Blackpool.

[George Freeman (Mid Norfolk) (Con)]

The hon. Gentleman is making a powerful point about Blackpool. I have many happy memoires of large party conferences there back in the day. He is talking about urban hospitality, but I want to make a plea for rural hospitality. My Mid Norfork constituency has 135 villages and 50 pubs, which are the heartbeat of the community; many businesses meet in them, and they are warm places in the winter. They are being hammered by high energy costs and the jobs tax, the tourism tax and the other taxes the Government have introduced. Rather than a £10 billion VAT cut for everyone, can we have targeted relief to rural hospitality venues, which are dying, along with the rural economy?

[Chris Webb]

The APPG has raised similar issues in our inquiries. We have said to the Government, at not just this Budget but the previous one, that we need to look at support packages, rather than sector-wide schemes. If the money is not available, we need to look at where the need is greatest right now.

The World Economic Forum’s travel and tourism development index places the UK 113th out of 119 countries for price competitiveness. Blackpool faces growing competition from domestic destinations and international markets, where hospitality VAT rates are often significantly lower.

Every £1 spent by a visitor in Blackpool moves through the wider economy to local suppliers, taxi drivers, independent retailers and cleaning businesses. When a family has a good weekend away, the benefit is felt far from the till.

If the Government want to invest in places such as Blackpool to deliver maximum value, they must also consider the tax environment in which our businesses operate. Our town continues to face significant challenges with economic inactivity and young people who are not in education, employment or training.

It is not just the lack of jobs: our young people are navigating entrenched multi-generational poverty, housing insecurity, caring responsibilities and poor health. They deserve the opportunity to get their lives on track. As I have said many times, hospitality is the sector best placed to give them their first step. I therefore welcome the partnership between the Government and major hospitality employers, facilitated by UKHospitality, which will deliver 100,000 opportunities for young people. But if we want businesses to create more jobs, take on more apprentices and invest in training, we must ensure that they have the confidence and capacity to grow.