Gareth Davies

We have to be clear that any support or tax cut has to be fully funded and cannot drive borrowing and debt even higher, particularly now that our debt has reached more than £3 trillion. Some have suggested that a 10% cut to VAT would cost £10.5 billion. As has been mentioned today, that is not an insignificant figure. I have not heard anybody detail how we should pay for such a significant cut, but I am sure the Minister would welcome suggestions. A VAT reduction is just one way in which we could support the hospitality industry. If hon. Members are serious about cutting taxes and being low-tax champions, let me suggest a few other policies to help hospitality survive and grow, which are fully funded as part of our £71 billion plan of savings. One of the measures addresses business rates. As has been pointed out, quite rightly, business rates are a significant contributing factor to the cost base of hospitality businesses. We have set out a plan to abolish business rates for 250,000 retail, hospitality and leisure businesses, which would cost £4 billion. Under Labour, business rates have increased. Some pubs and clubs are seeing their business rates increase by as much as 95% over just a couple of years. The Government inherited 75% rates relief for the sector, and then they cut it to 40%. I urge all Members to support the Conservative plan to bring 250,000 hospitality businesses out of paying business rates altogether. Perhaps more than any other sector, hospitality relies on workers. Working behind a bar or in a kitchen is where so many young people get their first taste of work, as was set out in many examples today. The £25 billion national insurance tax hike has made hiring young people far more costly—often too costly, when combined with Labour’s increase to business rates. Under this Government, the hardest thing to get right now is a job in the hospitality industry. That is not right and does not help young people. To address that, we Conservatives have outlined how we would cut in half the national insurance paid by an employer hiring someone between the age of 21 and 24. Halving national insurance would mean more young people getting a good start in life, fewer people starting life on benefits and employment costs cut for hospitality. That would cost £2.3 billion, paid for in full by reinstating the two-child benefit cap at a saving of £3.1 billion.