Unless something changes, we could see thousands of pubs shutting for good. I’ve seen an outpouring of frustration by operators on social media and I’ve been struck by how we all seem to agree on what’s required – a reduction in the VAT rate and business rates holiday.
Our trade associations have been lobbying the Government on our behalf for some time for that kind of support – a tough ask with previous administrations, but in the current climate you could argue it will be impossible.
However, if we can galvanise the strength of feeling among operators into action, we can amplify the efforts and arguments of the trade associations and in doing so, increase our chances of success.
I don’t believe the Government really understands the challenges we face and implications of not acting. The Government needs to see how worried operators are and hear our arguments for intervention – how they can help the industry and the wider economy. And a mass gathering of pub and hospitality operators like next week’s event, can only help strengthen our argument.
Reduced VAT impact
10% VAT rate will:
- save thousands of pubs – allowing them to stay open & stay trading
- save thousands of jobs – not just in the pubs, but thousands of local suppliers too
- allow operators to invest in their people & pubs
- mean operators can continue to repay Government backed Covid loans – every defaulted loan will increase Government debt
- help the UK economy recover & grow – we’re the 4th largest employer; a viable hospitality industry is vital to the UK’s economy
- supress inflation – the alternative is for pubs to pass cost rises on to customers by way of higher food and drink prices
Not a hand out
The Government needs to understand that a lower VAT rate isn’t a handout – it is simple creating a viable rate of taxation that will allow the industry to trade its way out of the current economic conditions. A 10% VAT rate for hospitality is comparable with rates paid in many other countries. France, Italy, Spain, Ireland, Greece are just some of our European neighbours who have VAT rates 9 to 13% for hospitality.
That gives them sensible margins and keeps the sector viable. They have these rates not part of a post-Covid support package - they were paying these rates before the pandemic and before the energy crisis. Those countries have recognised that if you want a thriving hospitality industry, you have to provide the right conditions. Give us the right conditions and we can help ourselves.
It’s simply not sustainable for us at 20%. It wasn’t really before the current crisis and it certainly isn’t now. If we value pubs – something has to change.
Winning the argument for a VAT cut will be a tough ask – to have a chance of success, we need to come together as an industry. That’s why I’ll be attending the Hospitality Demonstration next Monday 14 November in Parliament Square. Will you?
