VAT campaigner Borel still confident of tax cut for hospitality sector

Borel told the Publican’s Morning Advertiser​ that he rejected comments made by Conservative MP Andrew Griffith that VAT campaigners were embarking on an “exercise in fantasy politics” and that the Chancellor would not make a U-turn on his deficit reduction policy that “he defends every week”.

“Griffiths won a great victory in stopping the beer duty escalator and getting a 1p cut in beer tax,” said Borel. “I don’t know his motives for saying what he did about VAT. He cancelled a meeting we had planned in January, saying we were wasting time and the he was completely focused on beer duty.

“I admire the government’s plan for deficit reduction,” he added. “But MPs are getting increasingly scared that they won’t be re-elected, and the big issue is unemployment. That will trigger the decision on VAT.”

Borel admitted that he is well short of the membership target he set himself this time last year, when he promised 100 VAT Club members by December 2012. The current figure stands at 43 and is still seven shy of the number Borel contractually required by the end of April to trigger the second instalment of the membership fee. But Borel denied that he is losing momentum and support at a critical time in his campaign.

“They are paying,” said Borel. “They want to protect their investment.”

Borel revealed that the campaign is expecting a cash injection of £100,000 this month, some of which will be spent on a new campaign to demonstrate to the government and the public the benefits of a cut in VAT to 5% and near tax parity with supermarkets.

This campaign, details of which will be announced in June, will engage independent operators, accelerate membership and further strengthen VAT Club finances, promised Borel. “We will have 60 members in July, 70 in August and 80 in September.”

Borel has spoken to 125 pub and restaurant companies to date, and has recruited around one in three. The main objections he faces from target organisations are: “the campaign won’t succeed”; or “it might but we will get the benefits for free”.

There is also a suspicion in the market, Borel admitted, that he is personally profiting from the campaign. “People are scared that I’ve made £1m, but it’s not true.”

The campaign costs VAT Club £1,000 a day, and we have spent £1.44m so far. Of that £570,000 has been paid by members; the rest has been funded by the Borel family.

Borel provided a breakdown of the campaign’s costs, which include: 40% on salaries (for four permanent employees), 8% on rent, 6% on supplies, and 14% on travel and subsistence.

He keeps time sheets that have so far logged 12,500 hours of campaigning. But he knows time is running out for the VAT Club to achieve its first main objective – to secure a government commitment to reduce VAT in hospitality in the October 2013 pre-Budget statement.

“We have six months,” said Borel, insisting that he will hit his restated membership and financial targets and will lead the pub and restaurant industry all the way to the promised land of lower VAT. “I have negotiated tax in 60 countries, and won in 58.”