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Election special: What's on the table for hospitality?

30 May 2017 by
Election special: What's on the table for hospitality?

With hospitality rarely mentioned in election manifestos, we look at what the main political parties will deliver if put into power in next week's general election. David Harris reports

In the week before the general election, those in the UK hospitality industry have a lot to consider. Do the UK political parties care much about the hospitality industry? Which party would deliver what if they were put into power? And just how important is the hospitality business to national politicians?

Not very much, to judge from the amount of space devoted to hospitality in the party election manifestos. You might find the word ‘tourism', but you will struggle for anything as specific as ‘hotel' or ‘restaurant'. Indeed, a cynical reader could be forgiven for concluding that, as the party leaders go about the country drumming up votes, the main hotels and restaurants on their minds are likely to be the ones in which they are eating and sleeping at the end of a hard day's work. The parties may acknowledge when asked directly that the hospitality industry is an important element of the economy, but their manifestos do not really reflect this.

Industry reactions to the manifestos

Professional organisations have had a mixed reaction to the party manifestos, approving some policies and criticising others.

The BHA likes the Conservative proposal to follow the Migration Advisory Committee's (MAC) recommendations on how the visa system can better serve the economy. In fact, it would like the government to give the MAC even more clout and to bring it on a par with the Low Pay Commission, providing independent, impartial and depoliticised advice. It also gives the thumbs up to the Tory focus on skills.

Labour and the Lib Dems' plans to give EU nationals residence in the UK also meets with the BHA's approval, and it calls on all the parties to establish an independent review to set a "genuine living wage across all sectors".

The BHA is less happy with what it calls the "glaring omission" from all the main manifestos of a commitment to lowering tourism VAT, although it notes that this remains a Lib Dem policy.

Despite approving of the parties that have indicated they would let EU nationals already here stay in the country, the BHA still bemoans the "lack of clarity from all parties on how immigration policy should develop as a result of Brexit". It points to the KPMG report from March, which concluded that at least an extra 60,000 EU workers each year are required to keep UK hospitality operating and growing.

The fate of EU workers in the hospitality business is clearly a big concern. The Association of Licensed Multiple Retailers (ALMR) is among those that welcomes the Lib Dem pledge to guarantee the rights of those workers.

The ALMR also approves of the Lib Dem and Labour pledges to reform business rates. On the other hand, it has reservations about the Lib Dem suggestion of a minimum unit price for alcohol and worries about increasing wage costs for employers that might result from some Labour policies, such as the proposed ban on zero hour contracts.

ALMR chief executive Kate Nicholls said: "Flexible contracts can be a beneficial option for both employer and employee, particularly in the drinking out sector when demand fluctuates and many young people like to combine work with study."

For its part, the British Beer and Pub Association (BBPA) welcomed the Conservative's broad pledge to support business with lower taxes and job creation. Brigid Simmonds, BBPA chief executive, said: "I hope the overall emphasis on lower taxes will be extended to beer duty, where we strongly need a more competitive regime."

Conservatives

The Conservatives have indicated that EU workers already resident and working here will be welcome to stay, but stopped short of a guarantee. This is expected to come as a result of Brexit negotiations, but Theresa May clearly expects any guarantee to be reciprocal, with UK workers in the EU given similar rights.

The Conservatives plan to double the immigration skills charge imposed for each non-EU migrant worker to £2,000. The money would be used for skills training for UK workers.

More generally, the manifesto says that in the short term the party will ensure that the immigration system works for those sectors that are "suffering shortages in skills". In the medium term, the party plans to ask the guidance of the Migration Advisory Committee to make recommendations on how the visa system can "become better aligned with our modern industrial strategy".

The Conservatives say they will continue to "keep taxes as low as possible". The party's manifesto confirms its plan to cut corporation tax to 17% by 2020. By the same year, the personal allowance will have increased to £12,500 and top rate tax will not kick in until £50,000.

The party has also pledged to reform business rates and "make sure that revaluations are conducted more frequently to avoid large changes to the bills".

The Conservatives have renewed their pledge to cut down on red tape, with regulation of utilities highlighted as one area they will focus upon.

The party is committed to increasing the minimum wage from its current level of £7.50 an hour, but the manifesto bases this on an increase "to 60% of media earnings" by 2020, rather than on a cash figure.

The party has said it will scrap universal free meals for infants at primary schools.

Plaid Cymru

Plaid Cymru would guarantee the rights of all EU citizens already living and working in Wales, which should reassure the hospitality staff already established there, as well as those that employ them.

The party is also committed to offering skills training for all those under 25 without work, which would open up another potential source of labour for all Welsh businesses.

On business rates, Plaid says it would look at the possibility of moving towards a turnover-based system. It would abolish all rates for businesses with a rateable value of less than £10,000 a year and have tapered relief up to £20,000.

Staff would keep all tips in addition to the national living wage.

It would cut VAT for tourism businesses by an unspecified amount and would "double the funding for Visit Wales."

The party would also establish a national academy for Welsh tourism, with an on-site hotel and conference centre to provide hands-on learning up to degree level.

In 2019, to coincide with the 200th anniversary of the modern Eisteddfod in Carmarthen, Plaid would like a Celebrate Wales year to promote the country internationally.

Liberal Democrats

The Lib Dems' position on immigration is underpinned by their belief that the UK should stay in the EU. The party says: "We don't just want access to it; we want to remain members". It is calling for a referendum on the final Brexit deal so that the country can decide if it delivers everything they want, including "issues around staffing and skills".

The Lib Dems want to reverse Conservative cuts in corporation tax and capital gains tax. They also plan to review business rates, although the manifesto gives no details.

The party also wants to undertake a review of concerns over tips and service charges.

The Lib Dems plan to increase income tax by 1p (to better fund the NHS) and they point out that this would mean that someone earning £15,000 a year would "only pay an extra £35 a year, while those earning £100,000 will contribute an extra £885".

The party wants to "double the number of businesses that hire apprentices".

Labour

Labour says that because leaving the EU will mean an end to freedom of movement it will reform immigration, "but not at the cost of jobs and the economy". It plans to make the "changes that are needed to ensure fair and managed migration".

Labour would reform business rates to include annual revaluations to stop "periodic and unmanageable hikes".

On tips, the party says it would support the guidelines set out by the Association of Licensed Multiple Retailers.

Labour is committed to no increase in National Insurance for staff or employers.

The party wants to increase the national living wage to £10 an hour by 2020 and apply the wage to everyone over 18, rather than over 25 as now. It will also set up a new Living Wage Review Body, where the aim will be to set a wage "at a level needed for a decent life".

It says it will act to safeguard small and medium-sized businesses against late payment, "to ensure that every business, regardless of size, has the opportunity to flourish".

The party will also introduce "free, life-long education in further education colleges, enabling anyone to upskill or retrain at any point".

SNP

The SNP has called for an independence referendum "at the end of the Brexit process". Nicola Sturgeon said that a vote should be held "not now, but when the final terms of the deal are known".

The UK government has already rejected the SNP's call for a second referendum to be held in autumn 2018 or spring 2019, but Sturgeon says that would be "democratically unsustainable" if the SNP wins a majority of Scottish seats.

The SNP also wants Scotland to have control over immigration and to remain in the EU single market after Brexit.

If Scotland does vote to go it alone, then Edinburgh would have to negotiate with London on issues including security, the status of the pound sterling in Scotland and the division of the UK's assets.

On wages, the party plans to increase the minimum wage to over £10 per hour by the end of the next parliament, and supports a UK-wide increase in the higher rate of taxation from 45p to 50p. It will also back targeted reductions in National Insurance.

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