Tag: Kevin Foster

The speech made by Kevin Foster, the Conservative MP for Torbay, in Westminster Hall, the House of Commons, on 20 December 2022.

It is a pleasure to serve under your chairmanship, Mr Robertson, and to follow my good friend, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and hear his experiences of business. I congratulate my hon. Friend the Member for Carlisle (John Stevenson) on securing the debate, which is a timely chance to highlight the role that family businesses play in Torbay’s economy.

As my hon. Friend the Member for Carlisle reflected, family businesses make a major contribution to the UK economy overall. Oxford Economics estimated that there were 4.8 million family businesses in the UK in 2020, making up 85.9% of all private sector businesses. Those businesses employed 13.9 million workers, or 51.5% of all private sector employment, and contributed £575 billion to the UK economy. These are big numbers overall, despite most family businesses actually being small firms—something like three quarters of all family businesses in 2020 were sole traders with no employees. A further 21% have between one and nine employees, although I understand that the estimates were based partly on data collected the previous year.

It is interesting to note that those numbers represented a decrease. The number of family businesses decreased in 2020 from 5.2 million in 2019, when they employed 14.2 million people and contributed £637 billion to the economy. If the Treasury was here, it would be interested in the fact that such businesses paid £205 billion in tax receipts. Some of that may reflect the impact of the pandemic, not least given that the typical family business many of us think of is a shop or a guest house, both of which were affected by that period.

Many family businesses are not just sources of economic activity, but mainstays of the local community. A 2021 survey of family businesses conducted by PwC found that the vast majority of UK family businesses also continue to engage in some form of social responsibility activity. Some 74% of family businesses surveyed contributed to their local community, and 47% participated in traditional philanthropy or grant-based giving as a company.

Dr Cameron

The hon. Gentleman is making excellent points. Given that family businesses are such a focal component of our communities, does he agree they have a key role in reducing the disability employment gap, and are often the businesses that promote disability inclusion in our communities?

Kevin Foster

I completely agree. The type of support a family can provide to someone with disabilities—even in their own family, for example, by extending the care and support offered to their loved one and supporting them in the workplace—can be vital. Many families have rightly shifted their expectations of what a family member with disabilities will be able to do. To be honest, past attitudes might have been, “Could this person work?” or “Perhaps they shouldn’t, perhaps they won’t ever work.” Thankfully, there has now been a big change in many businesses. The hon. Member is right that family businesses can help to lead that charge.

The economic and social impact of family businesses can be seen clearly in Torbay, and it is important to reflect on this positive aspect. I will start with Rew Hotels. The Rew Hotel Group was founded in 1970 by Mrs Sylvia Rew, and is still family managed. Positioned right on Torquay’s seafront are the two hotels it runs: Livermead House and Livermead Cliff. The family are not just quiet owners but part of the frontline delivery of services to customers. It is a good example of a family business where the family has been able to develop two distinct offers while making the business a family in itself, with several senior staff members having started waiting tables or behind the bar, and then been given opportunities to develop their career within the hotel and the business

Susan’s Flower Shop has been trading at the heart of Paignton, Devon for over 50 years; the business itself has become a family, given that it has been trading for such a lengthy period. Brian and Susan, who are the leading figures, are involved in many aspects of local community work and supporting the bay as a whole.

There is also Conroy Couch, which is one of the oldest established businesses in Torquay and one of the oldest jewellers in the UK. It was first opened in 1863 by Mr Conroy Couch, and such was the quality of its initial fitting that the shop front has altered very little since, with the height of the entry doors serving as a reminder of a time when men commonly wore top hats and would be wearing them when they attempted to come through the door. Towards the end of the last century, the shop was taken over by the Rowe family, who are well-known and respected jewellers in Torquay. Today, David and his daughter Michelle still hold the values that the original founder of the business held dear: it is an active part of supporting local Rotary appeals, and works to ensure that Torquay high street has an annual Christmas lights display.

A larger example of a family business is Beverley Holidays, which operates three holiday parks in Torbay. It has been a family-run business for over 60 years, and during that period its owners have seen some dramatic changes in Torbay’s tourism sector. A caravan holiday might conjure up images from the past of putting coins in meters and sleeping on a sofa, yet many caravans in those parks offer standards equivalent to executive hotel suites, meaning that as a family business Beverley Holidays can compete with the large national chains on both price and quality.

Family business is not just about retail and tourism—we have heard some examples today. In that context, one company that particularly jumps to my mind is Casting Support Systems, or CSS as it is commonly known. It is a family business that was established by Ted Head, and produces a range of products for the distribution, aerospace and automotive industries. Earlier this year, it won the Queen’s award for enterprise for its export achievements and relocated to a brand new, purpose-built factory in Paignton. To give the scale of the impact of that family business, between 2018 and 2021 its exports rose from £267,000 to £1.7 million.

Another sector that can be overlooked is one that is often seen in our local communities, and one to which family businesses are integral: travelling fairs. The name Anderton and Rowlands is synonymous with funfairs and bank holidays in Devon and Cornwall. That business started back in 1854, when Albert Haslam, a variety artist, set up on his own, giving magic exhibitions. His tutor was one Professor Anderson, and upon his death, Albert assumed the name of Anderton. In 1903, the show first travelled under the name of Anderton and Rowlands, the name that has been in existence since. Since the 1950s, the firm has continued to expand, and the name Anderton and Rowlands is now in its fifth generation. It is currently owned by the DeVey family. George DeVey—who was born in a showman’s wagon travelling to a maternity hospital back in 1937—Simon DeVey and Simon DeVey Jr are key parts of it, and it is now the biggest fairground operator travelling in Devon and Cornwall.

Finally, I should mention Bygones in Torquay. Back in the 1980s, Ken Cuming’s obsession with railwayana was starting to outgrow his house; I understand that the final straw for his wife Patricia came in 1986, when he purchased a 27-tonne steam railway engine from Falmouth docks. As fortune would have it, the couple spotted that an old cinema had become available in St Marychurch, and bravely took the plunge of turning their hobby into a family business. Over the next year or so, with the help of an excellent mason and carpenter, and many friends, the family recreated a Victorian street scene, and on 23 May 1987 Bygones was opened to the public by the then mayor of Torbay. Sadly, Ken Cuming passed away in June 2017, but his wife Patricia, son Richard and daughter Amanda are still working daily in Bygones, which is a popular attraction that also supports veterans.

I could be here all day listing great family businesses in Torbay, and it has been good to recognise some of them in my speech. I am sure that many Members will be thinking of businesses in their own constituencies; we have already heard about some. However, family businesses are not immune to changes in our economy, especially on the high street. Sadly, it has been a long time since Rossiters department store in Paignton was bustling in the week before Christmas. Rossiters was part of Paignton for 150 years. Father Christmas often arrived there in dramatic style—one year on a turntable ladder, and once in the late 1980s even by parachute jump on to Paignton Green—but changing shopping trends and competition from online and out-of-town retail sadly led to it closing its doors in 2009. Even yesterday, we read that the future of a 106-year-old family business, Shaws the Drapers, which has stores across Devon, including one in Torquay, is under threat. Managers of the family-run company have admitted that it must change to survive, and, sadly, signs outside its shops state that all remaining stock is now on sale.

There are many positives to a strong family business sector, but what might inhibit its future growth? Family businesses are often based in and synonymous with one area. That means that the decisions of local councils can either boost or severely dent their prospects. Take, for example, the recent decisions of the coalition of Lib Dem and independent councillors that runs Torbay Council. Earlier this year, the coalition decided to close Torbay Road in Paignton to traffic as part of a pedestrianisation pilot. Torbay Road is a busy shopping street, and many businesses along that stretch of road and nearby are family owned. They have reported that trade has fallen off dramatically over the last three months. At a meeting last week, Conservative councillors requested that the coalition review the impact, but a review was decided not to be urgent enough. Similarly, the coalition’s decision to sign off a request from a developer to close Brixham Road for three months is unlikely to help many family businesses across our bay.

We must return to a familiar subject to me: business rates. Take Susan’s Flower Shop, which, as I mentioned earlier, is a family business that has been trading for just over 50 years. There is not a strong incentive to expand or maintain premises where business rates are concerned. Its shops are below the £12,000 rateable value, so no rates would be payable if it traded out of only one shop. As soon as a small family business has a second shop, rates become payable on both. That is a disincentive for family-run small businesses such as those in the floristry trade. Many shop owners would like to open a second shop for a family member to run when they are old enough. There is a reason why we see businesses called “Jacksons” or “Fredericksons” in our areas; that is a nod not just to a past surname, but to a time when a father might have set his son up in business after having taught him—Jack’s son—the trade. I am sure that many more empty shops would be filled by family businesses if that tax disincentive were removed.

I hope that the Minister will set out his thoughts on the following. First, how will the Government ensure that local councils pay attention to the needs of local family businesses when making decisions? Secondly, what consideration will be given to the position of family-run businesses in the long-awaited business rates review? Thirdly, not all members of a family have the skillsets required to grow a business, so they may need to recruit from outside the family for the first time; how are the Government supporting them to do so? Finally, what is the vision for family-owned businesses, from the Minister’s perspective? How does he see them being encouraged and nurtured by this Government? Knowing his own background and passion in the area, I expect that he will be particularly keen on that.

Family businesses are not just part of the economic output of our country, but an integral part of the social fabric. Without them, we would all be poorer, not only in the sense of the jobs and economic activity they create, but in the sense of the social responsibility that many show simply by wanting their businesses to be positive parts of the communities they are proud to call home.

The speech made by Kevin Foster, the Conservative MP for Torbay, in Westminster Hall, the House of Commons on 13 December 2022.

It is a genuine pleasure to serve under your chairmanship, Mr Mundell. At the outset, I must congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing the debate and giving us all a chance to reflect on the impact of business rates and levelling up.

Like my hon. Friend I represent a coastal constituency, although with a shoreline that faces east rather than west, and I do not want the levelling-up agenda to be based on a crude caricature of north versus south—often, the communities facing the greatest challenges lie on the southern coast. My hon. Friend did not speak for a moment too long; I found his points very interesting, and I was in great agreement with many of them with respect to how we need to change this form of taxation.

Communities such as Torbay can see wealth alongside areas with challenges, and we need to see levelling up in not only the national context, but the local, with the clear aim of turning back the tide on poverty, which is affecting some of the communities that I am proud to represent.

For Torbay, levelling up means looking to attract investment, which generates long-term jobs and ensures a genuinely vibrant local economy. That is where business rates can have such an impact. They effectively penalise businesses for investing in bricks and mortar, putting physical retail—not just, nowadays, high street retail—at a disadvantage to online outlets and potentially putting off development more widely across sectors such as tourism and hospitality, where a business rates liability will pretty much inevitably be created as part of a new investment.

Business rates might have been an irritant in the past, but they can often be the make-or-break factor now, especially in light of the other pressures that businesses face. Business rates are the bill that is not flexible. That bill is enforced by the magistrates, and it is often the final blow, as it takes little or no account of the actual income that a business receives, as my hon. Friend mentioned. It is literally a tax on existence. Businesses must pay the tax simply to be in their premises, before they open the door to do any trade or business.

Like my hon. Friend the Member for Waveney, I found the figures around rental revaluation extraordinary. It does not strike me that rental values for shops have fallen by only 10%, as on most high streets agents are offering businesses “Will you pay the business rates?” style deals on properties for certain periods of time. The figures do not reflect where rentals would have been five, six or seven years ago, or even a couple of years ago, before the impact of the pandemic.

I will give a quick example of the impact of the cost of business rates, when combined with other costs. A company that runs four hotels in my constituency has, unsurprisingly, seen utility costs increase dramatically, meaning that the business needs an additional net income of £8 per room—a 12% increase—for all 125,000 room nights, just to pay the increased costs. That is simply not achievable in the current economic circumstances. The company pays £6.5 million in payroll to 470 employees in Torbay and spends £7 million a year through the supply chain, mostly in the west country. The moves we are seeing to increase wages are welcome, but they will mean the company will have a 9% payroll increase in April 2023. The retail, hospitality and leisure business rates relief scheme, which has been confirmed to be 75% for 2023-24, is welcome and it will offset around £300,000 of the additional costs for business, but it will not reach the wider amounts needed, as those bills still need to be paid.

Similarly, another example is an innovative holiday park, with caravans that are the equivalent of staying in a hotel suite; the era of putting 50p in a meter is long gone—think caravans with widescreen TV and central heating. That business will potentially see its bill double, courtesy of its investment.

While we often focus on the impact of business rates on our high streets and town centres, the impact is much wider, especially in situations where it is not an option for staff to work from home or from remote locations, such as in the manufacturing or hospitality sectors. A holiday by Zoom or a pub night on Microsoft Teams will not be the same experience; a physical premises is needed to deliver those experiences.

What can be done? We need to look at providing further relief in the current system, particularly for small and medium-sized businesses. We need to realise that the days of retail and hospitality being a handy way to raise revenue for local services are now over. The high street corner is no longer the prime place to do business. There are department stores standing empty across many of our town centres, such as the former Debenhams on Torquay harbourside. We need not walk far from this Chamber to see what was once a large department store lying empty in what was a prime shopping area of London—a sight unimaginable back in 1990, when the uniform business rates were introduced.

It is increasingly the presence of business rates liability that can directly and adversely affect the chances of levelling up a community by discouraging investment in commercial properties. That was one reason why I supported the previous investment zone suggestion that allowed business rate reductions in key areas that needed regeneration.

Ultimately, a derelict and boarded-up building creates costs, not revenue, for the public purse. I urge the Government to look at what can be done further about business rates to ensure they do not become a barrier to the regeneration of our town centres, not least in the context of large national charities receiving a mandatory 80% relief, often increased to 100% relief by billing authorities. At the very least, parity for smaller businesses trading in retail, leisure and hospitality within our key areas for levelling up would be a welcome incentive, before finally getting on with what needs to be delivered: a major review of this form of taxation.

It is oft talked about, but there needs to be a better option for the future in a system that is fundamentally rooted in the pre-digital era of economic activity, when physical premises were an integral part of doing business. I appreciate that that is easily said and harder done, not least when we consider the £25 billion of revenue that has been referenced. However, we should not shy away from doing it simply because it would be hard. Taxes have changed in the past to reflect economic, scientific and technological changes. The same is needed now.

I cannot cover in a short speech every aspect of the links between business rates and levelling-up policy, alongside their impact. However, I hope the Minister in her response will reflect on how we need to consider the real disincentives of the tax for businesses such as hospitality, which must innately operate from a physical space, and the deterrent to operating retail from the high street, town centre or even the out-of-town shopping centre, which is facing huge competition. If we are to truly level up many coastal communities, those issues must be addressed and a revaluation on its own will simply not do that. If they are not, there is a danger that our taxation system, designed for an era when people went to a public payphone and had to go to a physical premises to buy something, will hit our town centres and not deliver the levelling up and regeneration that so much of Government spending is trying to achieve.

The speech made by Kevin Foster, the Conservative MP for Torbay, in the House of Commons on 30 November 2022.

It is a pleasure to serve under your chairmanship, Sir George. I congratulate my right hon. Friend the Member for Maldon (Sir John Whittingdale) on securing this debate on an issue that affects many businesses and communities.

Avian flu is not just about commercial poultry farms or agricultural interests; it has the potential to strike at the heart of the work being done to conserve some of the most endangered species on our planet. The Government must ensure that the approach taken, and the policy structure around it, is suitable for all situations in which avian flu may strike.

Some Members may be aware that Paignton zoo, which is part of the Wild Planet Trust and located in the heart of my Torbay constituency, was recently the site of the first avian flu outbreak at a zoo in England. It is highly unlikely to be the last. Zoos are innately open places. Local wildlife and human visitors are able to access them, and wild birds can mingle with some of the zoo’s stock, especially those species that do not need to be kept in an aviary. It will be obvious to Members that, in breeding birds, zoos have a very different purpose from that of commercial poultry operations. That means that the response to avian flu at a zoo that is focused on conservation objectives needs to be very different from that at a farm that is focused on egg or meat production.

It was late August when avian influenza arrived at Paignton zoo. At the onset of the outbreak, on the late August bank holiday Sunday, the zoo was ordered to close at no notice and with immediate effect. Thankfully, the outbreak was successfully contained and the zoo was permitted to reopen, with the birds under quarantine clearing through the surveillance regime, yet the zoo was closed to visitors for 10 days.

The approach to culling that would normally be taken at a poultry farm would have had a devastating effect at the zoo. I pass on the gratitude of the team at the zoo for the Secretary of State’s intervention, which prevented the unnecessary culling of healthy birds that posed no risk of disease spread. However, the zoo derives much of its revenue from the peak tourism season, so the final week of the school holidays is one of its biggest trading periods. The revenue lost from the enforced closure and additional related costs came to just under £1 million. The loss of a week’s trade for a zoo is not a simple one-out-of-52 loss; a week lost in summer can be equivalent to losing five to six weeks at another time of the year.

As I said, the normal approach to culling would have been devastating, and I am grateful that it was not applied, but the situation where a zoo is affected highlights a tension between the two fundamental strands of the current avian flu strategy—those relating to wild birds and to captive birds. The wild birds strategy is to monitor, because little can be done, while the captive birds approach is to stamp the flu out.

There are inherent tensions in simultaneously applying two fundamentally different approaches to the same disease, which can lead to practical challenges and inconsistencies on the ground in the case of a zoo. A more nuanced approach that recognises the challenges for a range of stakeholders impacted by the disease would help to mitigate the tensions, especially at a zoo such as Paignton, where, inevitably, both wild and captive birds are present on the same site.

The compensation scheme is similarly designed for the poultry industry, where the biggest impact for the business concerned is likely to be the value of the birds—their lost sale value. Despite the £1 million impact in lost sales and costs from the outbreak, Paignton zoo was offered £207—the value of the birds—as compensation. The £1 million loss will have a material impact on the charity and constrain investment plans focused on animal welfare and support for the zoo’s biodiversity protection programmes. Following the impact of the human pandemic, which heavily affected tourism, that is a bitter pill to swallow.

It is always easy to outline the problems, but it is vital we also highlight how the situation can be solved. Following the outbreak, the Wild Planet Trust conducted an after-action review. In addition to internal learnings, the review identified two important issues that merit further attention: ensuring fairness in financial compensation for zoos, and making changes to outbreak response arrangements that will help to deliver better outcomes in such circumstances.

First, the compensation scheme should be revised to ensure fairness and equitable loss-of-revenue treatment for all entities that are required to close as a result of a bird flu outbreak. That would recognise that compensation simply for the value of the bird does not reflect the overall impact on zoos. Secondly, decentralising testing capabilities and promoting delegated outbreak management decision making would allow more flexibility when dealing with unique locations. Thirdly, we should adapt the avian flu strategy to the new reality and ensure that lessons learned in a specific location such as a zoo are identified, and improvements are embedded, in parallel with continuing to conduct outbreak response operations.

Sadly, we are likely to see the experience of Paignton zoo repeated at zoos elsewhere. I hope that the Minister will take the lessons learned from the outbreak at the zoo, which the trust and I will be happy to share with him directly, and embed them in our future approach to dealing with avian flu. We simply cannot allow vital conservation work at our zoos to be the next victim.