Pubs minister says 'no chance' of VAT cut

Lewis told the ALMR Spring Conference last week: “I’ll be straight with you and you might not like the answer, but there’s no chance.

“The problem with VAT is the figures are just huge and the Treasury is not in a fiscal position to do it. You’re also talking to a Government and a chancellor who put up VAT, so it would be politically difficult to suddenly change that backwards.”

He also added that in countries where VAT is reduced on food and drink, there is no zero-rating on books and children’s clothes. “You can’t have it both ways.”

Jacques Borel, who has campaigned for a cut, told the PMA that he understood the minister’s arguments, but said that for a Government whose priority was full employment, a VAT cut for hospitality represented the cheapest way to achieve that.

Call of duty​

Regarding the difficulty of a policy change, he said: “When conditions change it is the duty of politicians to make a u-turn.”

And on zero-rated goods, he commented: “Why should pubs and restaurants pay for children’s clothes?”

Borel said that he had now met 51 MPs, and persuaded 50 of them about the merits of a VAT cut. He is expecting an Early Day Motion in June, sponsored by SDLP MP Margaret Ritchie, to attract more than 60 signatures.

The VAT Club is organising a Tax Equality Day on Wednesday 24 September, in which participating pubs will drop prices to show the effect a VAT cut would have.

Last week the VAT Club issued a template letter for publicans to lobby their MPs on a cut.

Potential​

Kate Nicholls, strategic affairs director at the ALMR, said: “We know that the industry will not be able to unlock its true potential to generate jobs, growth and investment in communities up and down the country until the disparities in the tax and regulatory regime which favour supermarkets at the expense of pubs and bars are addressed.

“We continue to work to highlight this to ministers and politicians across a range of business taxes and costs, including VAT.”