As I wrote last week, the trade is struggling to present a united front on the issue of minimum unit pricing for alcohol (the Campaign for Real Ale has just been forced to change its position on the matter) and the positions of many licensees and pub companies seem poles apart on the not-insignificant subject of statutory regulation.
But surely, one thing we can all agree on is that a cut in VAT for the sector is something worth pushing for together — especially now that Chancellor George Osborne has promised his beer-tax cut was “just the beginning” of Government help for the sector.
The PMA has long argued for a cut to 5% in VAT for hospitality businesses via its Thrive on 5 campaign. JD Wetherspoon’s boss Tim Martin has been almost single-minded in his focus on this goal.
And French whirlwind lobbyist Jacques Borel has built a powerful coalition of support among pub and restaurant companies for his VAT Club — promising the sector would create hundreds of thousands of jobs in return for the proposed tax cut.
Even Radio 4 Today programme ‘rottweiler’ John Humphrys recently said: “[The Chancellor] doesn’t stand a chance against that bloke.”
Not so, says Tory MP and All-Party Parliamentary Beer Group chairman Andrew Griffiths — a man who was name-checked in Osborne’s Budget speech for his heroic work in representing pubs and brewers and who has spent more time than most with the Chancellor in recent weeks.
He has called those of us who believe we can achieve a VAT cut from 20% to 5% “deluded, and embarking on an exercise in fantasy politics”, adding: “It simply isn’t going to happen and I can’t understand why sane and rational business people can’t see that.”
Oh Andrew, why have you forsaken us?
What do you know that we don’t? What has the Chancellor told you? And what did he mean by “more help” if not further tax incentives? So many questions!
Griffiths’ arguments, that a VAT cut would be a badly targeted and prohibitively expensive giveaway that won’t be considered while the Government is tackling the country’s UK budget deficit, ignore the sales growth and job creation angles — that any short-term losses to the exchequer will be offset by resultant higher GDP growth, VAT registrations and corporation tax receipts, and by lower unemployment benefit payments.
The Government is currently presiding over an employment crisis, with a million 18 to 24-year-olds out of work. It will not want to take that damning statistic into the next general election. And if Osborne wants the hospitality sector to help him make quick and serious inroads into that big number (as frankly only we can), he and his fellow Tory ministers and MPs — and his Lib-Dem coalition partners — might want to rethink what sounds to me like an unreasonably dismissive tone about the VAT opportunity.
A lot of people said we’d never get a beer-duty cut. They’re currently wiping egg off their face.
You’re a good guy, Andrew, but I’m hoping one day soon to hand you a moist towelette.