Queen’s Speech: Hospitality round-up

By Melodie Michel

- Last updated on GMT

Related tags Red tape Pension Government

The Queen's Speech set out target areas where the government aims to help businesses
The Queen's Speech set out target areas where the government aims to help businesses
BigHospitality looks at the key announcements made in the Queen’s Speech on 4 June and how they affect the hospitality industry.

Access to finance

The Small Business, Enterprise and Employment Bill announced by Her Majesty sets out target areas for the government to support SMEs and ensure they get access to finance – a welcome move in the hospitality sector.

“Legislation will be introduced to help make the United Kingdom the most attractive place to start, finance and grow a business. The bill will support small businesses by cutting bureaucracy and enabling them to access finance,” the Queen said.

The bill aims to improve access to finance for small businesses and payment practices between them and their customers. It also outlines an intention to give small firms fair access to the annual £230bn spent in public procurement contracts and increase the availability and sources of finance for businesses that want to invest.

Also included in the bill are frequent reviews of the red tape affecting small businesses to ensure regulations are either cut or remain effective, with a plan to place that requirement into law; and an increase in transparency around who owns and controls UK companies with a register of beneficial ownership, strengthening rules on director disqualifications and removing unnecessary costs from insolvency law.

However, speculation that the speech would make it mandatory for banks rejecting loan applications to refer businesses to alternative financiers was not confirmed.

Paul Mildenstein, CEO of alternative finance provider Liberis​, said: “We were anticipating greater detail in the Queen’s Speech today about helping SMEs access finance, particularly around banks matching SMEs they’ve rejected for loans with alternative finance providers. Whilst legislation to ensure banks signpost their rejected SMEs to alternative finance providers hasn’t come this time, we’re not deterred. We look forward to the response by the Chancellor and the Department of Business, Innovation and Skills to its SME Finance Consultation which we expect in the next few weeks.

OnePoll research commissioned by Liberis and released this week found almost a third of micro businesses are turned down for bank funding and 62 per cent of them are less likely to seek alternative funding sources than their larger SME counterparts, mainly because they don’t know where to look.

Zero hour contracts

As part of the same bill is a promise to “strengthen UK employment law by tackling national minimum wage abuses and cracking down on abuse in zero-hour contracts​”. Though the government has so far remained quite vague about this initiative, hospitality professionals warned that toughening employment laws in the wrong ways could be detrimental to the industry.

Martin Couchman, deputy chief executive of the British Hospitality Association (BHA) said: “The issue of zero-hour contracts has become a political football and it is not clear from the Queen’s Speech what ‘abuse’ the Government intends to deal with through legislation.  If this is restricted to exclusivity – that is clauses preventing workers from taking other employment – this would not cause any difficulties for the hospitality industry, but anything beyond this which reduced flexibility for both employers and employees would not be welcome.  We await the government’s decision with interest.”

Pub statutory code

The Queen’s announcement that “legislation will be introduced to provide for a new statutory code and an adjudicator to increase fairness for public house tenants” was greeted with glee by pub operators.

Part of the Small Business, Enterprise and Employment Bill, the initiative aims to bring fairness to the operators that run the 20,000 or so tied pubs across England and Wales with a new Statutory Code and independent adjudicator to ensure to mitigate disputes between publicans and pubcos.

The Association of Licensed Multiple Retailers (ALMR)’s strategic affairs director, Kate Nicholls said: “The Government pledges once again to tackle red tape and measures to force Departments to go further and faster in this area are welcome. Despite the Hospitality Red Tape Challenge, we still have not seen a significant reduction in the level of red tape being faced by operators on the ground. Few if any of the detailed proposals submitted by the industry have been taken forward. The Government can do much more to tackle legislative costs and bureaucracy in the sector and we hope that these measures go further in allowing businesses to invest and thrive.

“At the same time, care needs to be taken not to increase employment costs. The Government is right to make its focus the tackling of abuse rather than use of contract and pay terms but we need to ensure that pubs, clubs and restaurants still retain the flexibility to invest in their staff and drive growth.”

To coincide with the announcement, the ALMR published a manifesto to encourage growth and jobs in the pub industry​.

Further pension changes

As new research has shown that a lot of businesses are still unclear about how to implement the government’s auto-enrolment reforms​, the Queen also announced more changes to the UK’s pension model in her speech. “Legislation will be brought forward to give those who have saved discretion over the use of their retirement funds. My government’s pension reforms will also allow for innovation in the private pensions market to give greater control to employees, extend the ISA and Premium Bond schemes and abolish the savers’ ten pence tax rate,” she said.

The announcement was welcomed by pensions experts as a way to increase value for money for hospitality workers.

Morten Nilsson, CEO of NOW: Pensions said: “With hundreds of thousands of people working in the hospitality industry set to start saving into a pension as a result of auto-enrolment, ensuring that their pension delivers on its promises is a must. The government’s top priority should therefore be to address the things we know for certain have an impact on savers’ pension pots, namely the level of contributions made, the charges imposed and the design and performance of the default fund. 

“Get these fundamental things right, and savers will see a significant uplift in their income in retirement without the need for further complexity in scheme design.” 

Two million apprenticeships

Building on the trail set by the government’s apprenticeship reform​, the Queen announced an intention to increase the total number of apprenticeship places to 2m by the end of the current Parliament in 2015.

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