Bosses rally behind pub VAT cut campaign

By Michelle Perrett

- Last updated on GMT

Thrive on Five: More trade support
Thrive on Five: More trade support
The bosses of five major managed pubcos have declared support for the Publican's Morning Advertiser's (PMA's) Thrive on 5 campaign to get VAT reduced to 5% across the hospitality industry.

The bosses of five major managed pubcos have declared support for the Publican's Morning Advertiser's (PMA's) Thrive on 5 campaign to get VAT reduced to 5% across the hospitality industry.

The managed companies — JD Wetherspoon (JDW), Marston's, Spirit, Mitchells & Butlers (M&B) and Greene King — jointly employ more than 100,000 people in the sector.

They claim the move would help boost employment and generate more corporate tax revenues.

Campaign group the Federation of Small Businesses this week also backed calls for VAT to be cut to 5% for the tourism sector.

JDW chief executive John Hutson said: "The emotional response of politicians is to assume a cut in VAT is a cut in revenues. They are wrong.

"The PMA's campaign, Thrive on 5, is where it's at — 5% VAT on food and drink sold in pubs, restaurants and hotels will generate more revenue for the Government, as a result of more people eating out of home, leading to more employment in the industry, generating, in turn, more employment and corporation tax revenues."

His view is supported by Marston's chief executive Ralph Findlay who believes reducing tax would be the "single most helpful strategy" to boost the pub industry.

He added: "To get serious consideration by the Government we need to demonstrate that increased employment, higher consumer expenditure and reduced avoidance measures will more than offset any loss of VAT to the Chancellor."

Greene King chief executive Rooney Anand cited the example of other European countries where a VAT cut has lifted the hospitality sector.

He said: "We would support moves by the pub industry to encourage the Government to cut VAT to 10% or below for the hospitality industry.

"Early indications from other European countries suggest a cut can generate significant investment and employment, something the Government would like to see."

Spirit deputy chief executive Mike Tye said: "The industry should be lobbying with one voice for positive incentives for the pub sector."

M&B interim chief executive Jeremy Blood agreed, saying: "As a sector we must ensure any case we present for VAT reform is more robust, compelling and proves to be more beneficial to the public finances than any other industry."

The campaign already has the support of many leading trade associations, JD Wetherspoon boss Tim Martin and the UK Independence Party.

It also has the backing of French lobbyist Jacques Borel, the man behind the 5.5% VAT rate for the hospitality sector in France.

He says a cut in VAT to a similar level in the UK would create up to 320,000 jobs.

A Thrive on 5 group on Facebook has just under 1,000 members supporting the campaign. Go to Facebook and join the debate​.

The PMA is urging the industry to back the campaign, by presenting the case for a cut to their local MP.

We have a briefing pack on the beneficial effects of the lower VAT rate in France. Email Ewan.Turney@wrbm.com​ to get a copy.

Read more from the industry's top brass on Thrive on Five​.

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