Graham Evans is the former MP for Weaver Vale and ex-Chairman of the All-Party Parliamentary Beer Group.
The UK’s diverse and extensive hospitality sector is at the heart of the UK’s economic, cultural and social life. It covers an enormous range of businesses and sectors-within-sectors, incorporating some of our country’s most valuable and iconic assets, and thousands of entrepreneurs and small businesses.
However, despite this it remains an overlooked and arguably under-supported by Government.
The UK’s pubs are rightly recognised as being one of our most treasured cultural and tourist resources. Our nightclubs foster world famous music artists and our dynamic and innovative restaurants are increasingly exporting their brands abroad.
But the UK’s hospitality sector is bigger than the sum of its parts, supporting and sustaining tourism, retail, entertainment, agriculture, sports sectors and many more.
This is a sector with an annual £128 billion turnover, equal to five per cent of the UK’s GDP, and which directly employs three million people – two thirds of whom are under 30 – across a myriad of jobs, more than half of which are skilled or semi-skilled. Hospitality businesses were responsible for creating one in three of all new jobs in 2016.
In recent years, our growth has far outstripped the economy at almost nine per cent and we are forecast a 5.5 per cent annual growth to 2020. Hospitality also boasts great productivity: despite declining site numbers, turnover of the 50 largest eating and drinking out companies last year grew by four per cent.
Looking at the various positives within the industry, and the fantastic track record of job generation the sector boasts, ONS figures revealing a shock drop in the number of jobs created in the last quarter (-1.4 per cent) shows that eating and drinking out businesses are approaching a crucial tipping point. Employing around seven per cent of the private sector workforce, the drop in employment opportunities shows that even in the most robust of sectors, no one is immune to turbulent financial pressures.
In order to pull back on this decline, immediate action and support from the Government is required.
As the UK’s economy continues to become more streamlined and connected, and traditional boundaries between sectors blur, a synergy strategy to assist these businesses is needed more than ever. The need for interconnected support could not be more apparent as instability, exacerbated by Brexit, touches almost every corner of UK life.
Uncertainty breeds uncertainty for employers and investors alike, but a diverse and wide-ranging package of support for hospitality businesses can have an almost incalculably positive knock-on effect for the country.
A thriving nightclub in a town centre will also support taxi firms, restaurants, hotels and takeaways. The UK’s night time economy, of which nightclubs are a critical part, generates £66 billion in economic activity, around six per cent of UK GDP. In a recent survey of the owners of approximately 250 nightclubs and late-night venues across the UK, conducted by the Association of Licensed Multiple Retailers, respondents ranked business rates reform as the top action that the Government could take to help support the sector.
Similarly, a lively theatre scene or bumper crowd at a football match will mean good business for shops, pubs and bars. These businesses go hand-in-hand, and Government policy and support must reflect that. Action in government departments encompassing employment, planning, taxation, licensing, food and drink, and many other issues, will have a direct effect on a massive proportion of businesses.
There have been some positive signals recently with Amy Lamé, London’s Night Czar, acknowledging the value of the night time economy in the capital and taking steps to protect and nurture it. But with uncertainty still prevalent and potentially difficult economic times on the horizon, we need an approach by the Government that recognises the need for an inclusive and supportive policy-making environment – and ideally a comprehensive review of the whole business rates system.
Businesses recognise the need for a supportive and all-encompassing legislative environment, and many hospitality partnership and voluntary schemes have flourished across the UK to promote closer collaboration. This is exactly the frame of mind with which the Government should approach the opportunity of supporting growth. By recognising that positive action in one sector will be felt in another and by establishing a holistic approach to policy that incorporates a vast and intricately linked sector.