Campaigner Jacques Borel meets Treasury officials over hospitality sector VAT cut

Borel, who has successfully lobbied to reduce VAT for hospitality across Europe, spent almost two hours with officials setting out the case for lower VAT.

Borel said: “I had an excellent meeting with the Treasury. I explained that across Europe countries like France, Belgium, Germany, France, Sweden and Finland have reduced VAT and seen employment creation results that have been better than anticipated. In France, I forecast a reduction in VAT would create 105,000 jobs. In fact, 225,000 jobs were created.

“I explained that we have estimated a reduction in VAT to five per cent for the hospitality sector in the UK would create between 290,000 and 670,000 jobs. Of the savings for companies, we estimate 60 per cent would benefit customers in the form of reduced prices, 20 per cent would be spent on investment and improvements, 15% would be passed on to employees and five per cent would go to increased profits.

“The priority today is unemployment and reducing it. I was asked why VAT should be reduced for the hospitality sector. I made the point that VAT should be reduced for other industries where jobs can be created quickly – the construction industry, for example. I argued that the government must re-invest in the form of reduced VAT in those industries where they will get fast results. Building a rail system to ensure a faster train service between London and Edinburgh might be a sensible five-to-ten year investment, but a reduction in VAT within the hospitality industry will create many jobs in a matter of months.”

Borel, who was accompanied to the Treasury meeting by the Association of Licensed Multiple Retailers’ strategic affairs director Kate Nicholls, is also attending Conservative, Labour and Liberal Democrat annual conferences to meet MPs and publicise the case for lower VAT.

ALMR Strategic Affairs Director, Kate Nicholls said: "Pub and bar operators face an unfair competitive environment compared to supermarkets which is driving customers to drink at home and hampering their growth – what we need is positive action to encourage people to drink in a friendly, safe and supervised environment ”
She urged the Government to recognise that the industry deserves a VAT cut compared to other industries.

“My answer was that we were a priority because we generated 1 in 8 of all new jobs in 2011 (according to ONS Govt statistics) and 1 in 6 of all jobs for 16-24 year olds. A decade ago, we generated 1 in 5 and could deliver the same level of growth if we had a fiscal stimulus. These are jobs in all regions, all skill levels and not just low paid but also management roles. I firmly believe no other industry can deliver that and a VAT cut is the quickest and most effective way to deliver jobs and growth.”

The Jacques Borel VAT Club has support from 40 leading sector companies including Prezzo, Pizza Hut, JD Wetherspoon, Fuller’s, Shepherd Neame, St Austell, Mandarin Oriental and Charles Wells.