Covid-19: Hospitality Industry

Part of the debate – in the House of Commons at 6:23 pm on 24th March 2021.

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Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Northern Ireland), Liberal Democrat Spokesperson (Cabinet Office) 6:23 pm, 24th March 2021

The hospitality industry is of enormous importance to the Northern Isles, and an integral part of our well- developed visitor economy. Hospitality, I like to think, is something that comes very naturally to us in Orkney and Shetland. Indeed, we were described by one visitor to me a couple of years ago as being “dangerously hospitable”—I know exactly what he meant.

It is worth reflecting that this time last year, those in the visitor economy and hospitality industry were saying that local businesses feared that this situation would last for three winters. We would come out of six quiet months, and instead of the six good months that would normally be expected, businesses would be quiet, then there would again be the six quiet months of the winter. That is where we now are, except that this time last year, we believed, and indeed hoped, that we would be coming out of this. It is now clear that we are in fact some distance from being out of it. It is clear from the limited opening that we had in summer last year, that when it arrives, recovery will not come at a uniform pace. For self-catering businesses in Orkney and Shetland, business returned easily, but for the bed and breakfasts and hotels, it was a much more difficult path back to recovery.

It is also the case that in communities such as mine—I am sure this is true of rural communities across the whole country—the hospitality industry and the visitor economy are integrated with just about every other sector in our local economies. The craft industries, such as knitwear and jewellery manufacturers, depend on it. We have also seen the depression of hospitality across the whole of the United Kingdom; in Orkney and Shetland, that means that the premium producers of beef and lamb and the fish and shellfish producers are also suffering, because the restaurants are not open to take their products.

It feels like we have all had a year on a life support machine, as far as the visitor economy is concerned. Even as we emerge from that, it is still going to be necessary for some of the intensive care to continue. For the Government, that means that we cannot have immediate withdrawal of things like the furlough scheme: they will have to look at a tapering-off of that support, and it will have to be looked at sector by sector, and possibly even region by region. As others have said, the reduction of value-added tax for the hospitality industry has been of massive importance, and indeed there is a strong case, which many of us have made over many years, for it to become permanent. I do hope that that is something that the Treasury will now consider.