Last week it emerged that the proposed cost to the Exchequer of a cut in VAT to 5% would be between £11bn and £12bn in lost tax revenue every year.
All-Party Parliamentary Beer Group chairman and Burton MP Andrew Griffiths, who obtained the figures from the Treasury, said such a cut would be “absolutely unimaginable” for the Chancellor.
Griffiths told the Publican’s Morning Advertiser: “This is the first time we have had a definitive figure for the cost to the taxpayer of the VAT Club campaign.”
While he took on board the VAT Club’s argument that a cut would generate sales, jobs and tax income, Griffiths added: “These numbers put into sharp perspective how difficult an ask this is.
“It is absolutely unimaginable that any Chancellor could contemplate giving such a large-scale tax break to one industry.”
He advised those campaigning for the cut to be “more moderate and realistic” about what Osborne can do. “My question to those running the VAT campaign is, ‘do they have a single MP that will stand up and argue their case to Government’?”
Tax campaigner Jacques Borel, who heads up the VAT Club and has won tax breaks for hospitality in other countries, said there are currently no MPs backing the move.
He said Britain is the “most difficult” market he has dealt with, but claimed it was more likely there will be movement from the Government on the issue before the 2015 general election.
Borel originally targeted a commitment for a VAT cut from Osborne in the 2013 Autumn Statement and the cut itself in the 2014 Budget.
He has not met the Chancellor, but presented 500 pages of evidence on the benefits of a VAT cut to Treasury officials. Borel said he had met Government ministers, but refused to name them. “There is a rule in lobbying that you should not go to the ministers too early,” he added.
Borel denied suggestions that there has been a lack of progress, despite major funding from the trade.
He said people need to understand the “magnitude of the effort” required, claiming it took €3.7m (£3.1m) to fund successful lobbying efforts in Brussels.
Money raised in the UK has so far been used to pay for 12,000 lobbying hours, surveys and research.
The VAT Club recently employed lobbying firm FleishmanHillard to help advise the campaign and compile a new hitlist of 120 influential people to visit.
JD Wetherspoon chairman Tim Martin told the PMA he believes the campaign has made progress.
“The first success is that individual publicans and the industry are very well aware of the argument, and that is a big achievement. No-one has said the arguments in favour of tax parity [with supermarkets] are misconceived.
“I think that is tremendous progress, but the knee-jerk reaction from a lot of people is that the Government has no money. But what is being asked for is 1% of the £700bn the Government spends.”
Martin risked escalating his spat with Griffiths by saying: “He should grow up or he will find himself competing against me for his seat at the next election. I am convinced I’d be a shoo-in.”
Do you believe the VAT cut campaign will succeed?