Speaking in the House of Commons on Wednesday 22 January, Labour MP for South Shields Emma Lewell-Buck urged Chancellor Rachel Reeves to consider reducing VAT for the hospitality, tourism and leisure sectors.
Lewell-Buck said: “As my right honourable friend knows, South Shields is a gorgeous coastal tourist town and we pride ourselves on our small businesses and our strong hospitality industry.
“But she will also know that they are struggling from years of neglect from the benchers opposite. In order to help them, can she please outline what considerations she has given to reducing VAT [for] hospitality, leisure and tourism.”
Worse off
In response, Reeves thanked Lewell-Buck for her question and recounted a “very nice” dinner of fish and chips she had enjoyed in the MP’s constituency a few years ago, adding she was a “strong advocate” for local businesses in South Shields.
The Chancellor continued: “In the Budget we were able to extend a business rates relief of 40% for the retail, hospitality and leisure sectors in the next financial year and then move it onto a fairer footing so that high street businesses and smaller businesses pay fairer rates of business tax compared, for example, with online giants.”
Following the exchange, many took to social media to express their disappointment with Reeves’ response.
Posting on X, formerly known as Twitter, licensee of The Plough in Cheltenham, Emma Gibbon, said: “Thank you for asking the question. Tone deaf answer as usual. Her 40% reduction increases the bill for the tax year as it was previously 70%, while increasing the wage bill for these businesses through employers NI. We are far worse off under this Government, didn’t think that was possible!”
Important issue
UKHospitality (UKH) chief executive Kate Nicholls also commented on the discussion on X.
Nicholls said: “Thank you for your continued support and for raising such an important issue.
“Hospitality led regeneration is so important for investment in good quality jobs, people and communities like South Shields and reducing the tax burden will help drive that.”
Earlier this week, JD Wetherspoon chairman Tim Martin also called on the Government to address VAT “distortions” for the sector, warning the current disparity between the on and off trade would “create less pubs and more supermarkets”.
