Hospitality Sector VAT: Local Economies, Employment and Growth

Priti Patel Excerpts

Thursday 12th November 2026 Westminster Hall

[Chris Webb (Blackpool South) (Lab)]

I apologise for my slight delay in being here, Dr Huq; I had a personal incident back home and I was just on the phone about it.

As the chair of the all-party parliamentary group on hospitality and tourism, and the MP for a proud seaside town, I welcome this opportunity to talk about the important and timely issue of the role that VAT policy can play in supporting hospitality, tourism, employment and economic growth.

Hospitality is an important industry for communities across the country, employing around 3.5 million people nationally. On average, it provides work for 5,000 people in each constituency, but for constituencies such as Blackpool South that average figure is more than doubled. Our visitor economy supports local jobs, attracts investment and drives regeneration. Hospitality is central to our economic success and our identity. Hospitality jobs matter to local people and to the town.

For many people in Blackpool, including myself, hospitality gave us our first pay packet, our first reference and our first introduction to the world of work, and for many people that first job in hospitality turns into a career. I welcome the Government’s recent business rates freeze package for retail, hospitality and leisure. That freeze will benefit thousands of businesses in Blackpool. The changes to thresholds will mean that 68% of retail, hospitality and leisure properties in our town will now pay no business rates at all. That is a significant intervention, demonstrating that Ministers recognise the importance of these sectors.

However, we need to go further. Alongside Kate Shane, CEO of Blackpool Tourism Ltd, I continue to make the case for a Blackpool tourism enterprise zone, building on the existing enterprise zone model and extending it to our hospitality and tourism economy to unlock further growth, investment and job creation.

[Priti Patel (Witham) (Con)]

It is very nice to hear about Blackpool and everything in the hon. Gentleman’s constituency; I declare that I have visited Blackpool on many occasions. Hospitality businesses in the Witham constituency have been hit just as hard by VAT on the sector, as well as by employment taxes and the cumulative burden of increased taxation. Would he consider working with all of us in this debate to get the Government to recognise that at the next fiscal event—which will be next year, or even in the Finance Bill, when it arrives—by making changes to the VAT regime for hospitality, which is such an important sector?

[Chris Webb]

I thank the right hon. Lady for her intervention. I hope that my actions as the chair of the APPG on hospitality and tourism for the last two and a half years have shown that I will work with anyone across this House to support hospitality. The APPG has been quite vocal, including in our inquiries, about why there is a need to lower VAT, and we will continue to make that case.

Thousands of residents in my constituency have backed my idea to build a state-of-the-art arena at the Blackpool Central site, and we also have Government support for this proposal. However, by going further to support our tourism businesses at a policy level, we can give large investors the confidence to come to Blackpool, and ensure its future as a modern and leading entertainment destination, especially as we are in the final of the city of culture contest, which I know we will win.

Blackpool was built as a place of rest, relaxation and entertainment for the working classes, and our visitors today continue to be highly price-sensitive. Blackpool prides itself on being able to offer a good family trip for the price of car parking, an ice cream and a fistful of 2p coins to feed the arcade machines. Thanks to the work of Blackpool council and Blackpool Tourism Ltd, we offer large-scale free events, ranging from our brilliant airshow to the Blackpool Illuminations, which bring hordes of tourists to our coast in search of a family budget-friendly trip.

However, we also rely on families spending much more money than they do already. When offered value for money, they will do so, but small increases in the cost of accommodation, meals, attractions and entertainment influence how long a family chooses to stay.