Home Business News Labour government urged to slash VAT on hospitality to safeguard the future of the sector

Labour government urged to slash VAT on hospitality to safeguard the future of the sector

by LLB political Reporter
10th Oct 23 9:48 am

Sacha Lord, the Night Time Economy Adviser for Greater Manchester, has called on the next Labour government to cut VAT paid by the UK hospitality industry from 20% to 12.5% as part of an ambitious plan to safeguard the future of the sector.

The move would result in pubs, clubs and restaurants paying the same rate of VAT they were charged on a  temporary basis during the Covid-19 pandemic. It would also bring the UK into line with many European countries, where the rate is often set at below 10 per cent.

Lord, who jointly set up the annual two-day Park Life festival in Manchester, will also demand the ‘outdated and unfair’ business rate regime is overhauled and that businesses providing a social and community good – including pubs and restaurants – pay a lower amount.

The proposals form part of a five-point policy plan to be outlined by Lord at the Labour party’s annual conference in Liverpool, which begins this weekend. Other measures include handing more powers to regulator Ofgem so that it can force energy companies to release businesses from expensive fixed-term contracts under which the price of power is set artificially high.

Lord, who is also co-founder of the Warehouse Project club nights in greater Manchester, said: “Nearly 5,000 licensed premises in the UK closed in the year to March 2023. This has a devastating effect on the communities they serve and on the economies of the towns and cities where they were based.  The 12.5 per cent VAT rate for the hospitality industry was a lifeline for the sectors and it must be reinstated either by this government or the next one, which I hope will be led by Sir Keir Starmer. The people’s party should implement policies that help the venues, pubs and place the people frequent”.

He added: “Businesses like these form part of the social glue that binds our towns and cities together. I have set out a plan to ensure they are viable today, tomorrow and for many years to come. The hospitality industry does not want or expect handouts, but it does need a business and regulatory environment in which it can flourish after a period of unprecedented economic hardship”.

The plan also calls for local and regional authorities to be handed more power to implement licensing hours in line with local demands and needs by giving them greater freedom to extend opening hours, temporarily or permanently. Currently, they are constrained by a one-size-fits-all licensing regime that is set by central government.

It also sets out steps to encourage young people to pursue careers in the industry by establishing a T-level in hospitality, alongside the existing T-level in catering. T-levels were introduced in September 2020 to equip 16-18 year olds with the technical and vocational skills needed to gain employment in industry and commerce.

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