Beer group chairman Andrew Griffiths labels VAT cut campaigners as "deluded"

The MP for Burton said the idea the Chancellor might approve a multi-million pound tax break for the hospitality sector was not “just a pipe dream” but “risks expending political capital the industry might have built up in the recent duty debate”.  

Griffiths told the Publican’s Morning Advertiser he believes that a VAT cut is not going to happen as it would involve the Chancellor making a U-turn on a policy he defends every week.

He said: “My real frustration is that we saw at the recent Budget what can be achieved when the industry works together, with a common cause, a single message and a strong and compelling argument. We achieved the first beer duty cut in 54 years, and built a relationship with Government that could be a huge help to the beleaguered beer and pub sector. Yet as a politician I couldn’t seriously go into the Treasury and, with a straight face, make the case for a VAT cut like this.

“We need to come up with credible plans for what that help should look like, not expect him to shake some magic money tree and rain money down on us.”

However, campaigner Jacques Borel, who runs the VAT Club, which has 43 pub, restaurant and hotel operator members, told the PMA: “It is a long process which involves a lot of patience and costs a lot of money.

“We have to work hand in hand. It is impossible to predict the autumn statement of 2013. I have learned with changes of legislation in more than 52 years you have to work very hard. Nobody knew about the beer duty cut until one week in advance. The Government’s plan will have to be amended because the main problem at the general election, which is two years from now, will be unemployment.”

Borel admitted the VAT Club was short of its target of 50 members by the end of April 2013. “We did not get there. We are late. People are interested, people talk and I visit five companies a day. I hope to have 80 by October because I do believe things are going to move.”

He said that, to date, one-third of VAT Club lobbying has been paid for by the industry while the remainder has been funded by the Borel family.

JD Wetherspoon chairman Tim Martin, responding to Griffiths, said: “I think he has completely misunderstood the point and the argument. Ten
thousand pubs have closed down in recent years, losing thousands of jobs and probably hundreds of millions
of pounds of taxes for the Government.

“Pubs have lost 50% of their trade to supermarkets since VAT was increased about 30 years ago. All pubs want is tax parity with supermarkets. If supermarkets pay no VAT on food, why should pubs? Mr Griffiths has not addressed this
point at all.”

However, Stonegate chairman Ian Payne said he broadly agreed with Griffiths’ comments. He said: “That is why we have not joined the VAT Club.”