MPs Urge Rachel Reeves To Cut VAT And Business Rates For Pubs And Restaurants
3 min read
A group of cross-party MPs is urging the government to reduce VAT and business rates for pubs and restaurants at the Budget later this month.
In a letter to Chancellor Rachel Reeves, seen by PoliticsHome, the MPs warn that the hospitality sector nationwide is being harmed by "rising costs and a high tax burden".
The push is being led by Chris Webb, Labour MP for Blackpool South and Chair of the All-Party Parliamentary Group for Hospitality and Tourism.
Other signatories include Labour MPs Jo Platt, Dan Aldridge and Connor Naismith; Conservative MPs Bob Blackman, Caroline Dinenage and Jack Rankin; and Lib Dems Sarah Dyke and Steve Darling.
The MPs also state in their letter to Reeves that they are concerned that pressures on pubs and restaurants will be further compounded by the forthcoming Employment Rights Bill.
It comes after the APPG took evidence from the hospitality sector in late October.
"Businesses from across the sector, including pubs, hotels, night-time venues and leisure operators, spoke with one voice about the challenges they face and the opportunities that could be unlocked with the right policy support," said the letter, which PoliticsHome understands was sent to the Chancellor this week ahead of the Budget on 26 November.
“Over the summer, we have also heard directly from hospitality and tourism businesses in our constituencies across the country.
“From rural pubs and seaside hotels to city-centre restaurants and visitor attractions, the message was consistent: rising costs and a high tax burden are holding back investment, job creation and the recovery of local high streets.
“There are also strong concerns that these cost pressures are going to be further compounded by the forthcoming Employment Rights Bill.”
The group wants ministers to reduce VAT from 20 per cent and act on the "urgent need to reform the business rates system".
The letter to Reeves said that the hospital sector faces some of the highest property taxes, making up almost 10 per cent of business rates, even though it accounts for 3 per cent of businesses that qualify.
The MPs also want the government to give the sector greater recognition within the UK's wider growth and skills agenda.
Hospitality and tourism in the UK employs more than 3.5m people, contributing £93bn to the economy and generating £54bn in tax revenues each year, according to UKHospitality.
However, the trade body also estimated that almost 5,000 hospitality venues closed for good in the last year amid ongoing financial pressures.
A government spokesperson told PoliticsHome: “Pubs, restaurants and cafes are vital to local communities, that's why we’re cutting the cost of licensing, lowering their business rates and helping more hospitality businesses offer pavement drinks and al fresco dining, on top of cutting alcohol duty on draught pints and capping Corporation Tax.”
