More than 800 pub, restaurant and hotel leaders have urged Prime Minister Andy Burnham to cut VAT for hospitality from 20% to 10%, warning that thousands of jobs are at risk without action to ease the sector’s growing tax burden.
Major operators including Greene King, Fuller’s, Wetherspoons, Marriott and Center Parcs have signed the letter alongside chefs Tom Kerridge, Angela Hartnett and Heston Blumenthal.
They are calling on Mr Burnham to honour comments he made in February, when he backed a 10% hospitality VAT rate “because of the social value that your businesses bring to places and towns that need that life injected into them”.
UKHospitality estimates measures announced in Labour’s first two Budgets have added £6.8billion to businesses’ costs through higher wages, employer National Insurance, business rates and employment legislation. It said three hospitality venues were now closing every day.
The intervention comes days after the Government announced plans to allow local authorities to impose tourist taxes on hotels and other accommodation, which UKHospitality estimates could add a further £1.6billion to the sector’s costs.
The letter, published in today's Telegraph, said: “Without action, closures will only continue to accelerate, jobs will continue to be lost and opportunities for young people reduced.
“A lower rate of VAT for hospitality can turn closures into openings, lost jobs into new jobs and boarded-up high streets into thriving centres of community.”
Mr Kerridge added: “The reality is that 20pc VAT is holding hospitality back.
“Businesses are already dealing with rising wages, energy bills, food costs and business rates. We’re seeing the consequences, with businesses closing their doors every single week.
“We don’t need another promise. We need action.”