Covid-19: Hospitality Industry

Part of the debate – in the House of Commons at 5:43 pm on 24th March 2021.

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Photo of Patricia Gibson Patricia Gibson Shadow SNP Spokesperson (Housing, Communities and Local Government) 5:43 pm, 24th March 2021

This pandemic has posed challenges for all of us and for every business, not least the hospitality sector. This very important but beleaguered industry—the third largest employer across the UK—will take some time to recover from this health pandemic. Parts of the industry are on the verge of collapse and it was a mistake for the UK Government not to provide the kind of sector-specific support that it so desperately needed. The VAT cut is welcome, but the industry faces a cliff-edge in September, which could prove a death-knell to those barely hanging on. The importance of extending the VAT cut until at least the end of the year must not be overlooked if we want to save as many businesses and jobs in the sector as possible. Many hospitality businesses operate on a seasonal basis, and therefore may have to wait until next year before their balance sheet starts to begin to look healthy again.

Despite my repeated representations, no consideration has been given to the unique challenges facing operators of hospitality businesses in island communities—such as Arran in my constituency, which has at times during this pandemic been subject to higher restriction levels than mainland communities—which are concerned that islands may not necessarily be able to exit the pandemic at the same time as mainland communities.

The Scottish Government are doing all they can with the limited powers they have, and their year-long hospitality rates relief remains more generous than the three-month relief offered in England. Indeed, Scotland has the most generous non-domestic rates regime in the UK, but we also need business interruption loan schemes to be converted into grants, something I called for last April, in order to save businesses and jobs. The pressing need for that grows by the day. From April the hospitality sector, already on its knees, will be expected to repay these loans, however gradually, and it is clear that many businesses in the sector will be unable to do so and will only add to the debt and job crisis that we face. So I ask the Minister: extend the VAT cut until at least the end of the year. Look at what additional support can be given to our island communities, given their unique circumstances. Convert business interruption loans to grants and continue furlough for as long as restrictions remain in place. The UK Government surely understand the need to avoid business failures across the sector, as well as mass job losses. That does not need to happen, and I urge the Minister to do all he can to help us avoid that outcome.