MPs back calls for hospitality VAT cut in parliamentary debate

Cross-party MPs have backed calls to offer more support to the hospitality industry, including a cut in VAT.

In a Westminster Hall debate yesterday on ‘fiscal support for the hospitality’, which was secured by Alyn Smith, MP for Stirling (SNP), there was broad agreement on the need for further action from the government.

Many MPs echoed the sector’s key asks ahead of the spring budget on 6 March, including reducing VAT, addressing business rates increases due in April and a wider reform of the system.

Smith said: “Am I looking for special treatment for the hospitality sector? Yes. I think they need it and I think they deserve it. I think they need it because of unprecedented economics times we’re living through and they deserve it because these businesses are not just part of our economy.

“They’re a part of our society, they’re community hubs, they contribute to our sense of place, they keep our high streets busy. So, what am I calling for? If you remember only two words from me today, it is cut VAT.”

Tobias Ellwood, MP for Bournemouth East (Conservative), said the hospitality sector was “screaming out that VAT is too high”.

“Please reconsider the decision to raise VAT to 20%, otherwise you will face ever more business closures and subsequently raise less tax for the Exchequer,” he added.

Steve Double, MP for St Austell and Newquay (Conservative), said: “I think we need more fundamental reform of business rates for the hospitality sector to reduce the burden of that particular tax.”

Tim Farron, MP for Westmorland and Lonsdale (Liberal Democrat), said he hoped ministers would listen to concerns and “back a sector that will boost our economy to the tune of billions more”.

Rachael Maskell, MP for York Central (Labour), said: “The hospitality sector is at the sharp end of all markets sensitivities. It feels every economic challenge acutely. The sector needs support.”

Last April, the government said it had “no plans” to reduce hospitality VAT after a petition on the issue gained over 17,000 signatures.

Andy Lennox, who runs the Fired Up hospitality group in Dorset, has since started a new petition which has received over 14,000 signatures. He told The Caterer he had worked with Ellwood, his local MP, on the issue.

UKHospitality, which last month set out a three-point campaign plan for 2024 as the country prepares for a general election, said it was promising to see cross-party support on key issues in the debate.

Kate Nicholls, chief executive of UKHospitality, said: “It was excellent to see so many MPs attend the debate, responding to our calls and those of hundreds of hospitality businesses that urged them to do so.

“It’s evident from the debate that MPs recognise the challenges facing the sector and back our calls for urgent action. There was particular cross-party support to lower the rate of VAT and reform business rates – all priority asks of ours.

“I hope the strength of feeling shown today is heard loud and clear by the government and that they take the necessary action in the budget to help this strategically important sector.”

Prime minister Rishi Sunak will have to call the next election this year to ensure it takes place before 28 January 2025, five years from the day the current parliament first met.

To view Lennox's petition, click here.

Image: Shutterstock