Retail and Hospitality Sector

Lord Borwick Excerpts

Thursday 22nd January 2026 Lords Chamber

[Lord Borwick (Con)]

First, I must declare my interest, in that my wife, Victoria, is chairman of VisitEngland—what older Peers might call the English Tourist Board.

I congratulate all noble Lords who have made their maiden speeches. I congratulate the noble Baroness, Lady Monckton of Dallington Forest, on securing this debate on such an important subject. It has allowed me to open up an unimportant interest in my personal history: the fact that I was born in a hotel. I can claim to be one of the few people to have arrived at a hotel stark naked. Noble Lords may have left a hotel stark naked, in circumstances that I would rather not know, but very few will have arrived at one in that state.

Retail and hospitality are industries with much in common, but they have at least one important difference. In hospitality, problems, like babies, tend to arrive at strange hours of the day and night. An innkeeper must have someone who is responsible for solving problems available 24 hours a day, and someone who can solve problems at minimum cost is likely to be paid above minimum wage. Retail has a much more predictable time cycle of problems, but they are no less urgent. Shoplifting is a growing problem for all retail businesses, and government policy could be more helpful. Science could be used, in the form of permitting the more widespread use by shopkeepers of facial recognition systems in stores. I have little doubt that this will be considered on these Benches in due course.

The more interesting subject is the problems that the two sectors have in common. The most clear-cut is that both sectors have a relatively high use of minimum wage labour, because they use a lot of young people. For many people, a job in retail or hospitality is their first interaction with that wonderful, valuable and rare creature: the customer. They learn something in their first job that will be invaluable and exciting—that customers can and must be satisfied. Some young people learn lessons in self-reliance from retail and hospitality that they have not achieved in years of schooling. With a bit of luck, they might have been at a school that has a scheme run by a fabulous charity called Young Enterprise, which teaches 15 year-olds to run a small business. It is hoped that the kids pick up entrepreneurialism through this route. Last year, that great charity, founded by an old friend of mine, the late Sir Walter Salomon, taught more than 566,000 young people how to manage money and start a business.

However, no amount of entrepreneurial skill teaches you to cope with the biggest problem that retail and hospitality have in common: the cost of taxation in the form of national insurance and business rates. No doubt other noble Lords will talk of the difficulties caused by a tax on jobs—as national insurance is sometimes called by those not calling it a disguised income tax—but business rates have a peculiarity of rising fast and unpredictably. The recent rise in business rates has caused a lot of stress to shopkeepers, uncertain if their customers will be prepared to pay the increase in retail prices needed to finance it. Of all the problems caused by government to business, the most intractable and dispiriting will always be taxation.

What is the solution? It is entrepreneurs. Behind every retail shop and every hospitality pub is an entrepreneur. They need to be encouraged. If we are lucky, she or he will be a driven individual, determined to do well despite problems. These entrepreneurs feel unappreciated —so many of them are leaving for places such as Dubai because of government policy. This happened in the 1960s and was called the brain drain. Their children, the entrepreneurs of the future, may easily never come back. That is one of the tragedies of socialism.