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In the House of Commons yesterday (Wednesday 8 July), Liberal Democrat MP for St Ives Andrew George outlined the challenges facing the sector currently and asked if the Government will look again at what measures it can take to support the industry.
He said: “The hospitality sector faces the very high risk for substantial business failure within the next 12 months as a result of the tax burdens, which they have to face, simply for attempting to survive rather than shifting them to a tax burden for succeeding...from VAT and business rates to corporation tax.
“Will the minister look again at this before real catastrophe comes to the sector? To talk to Treasury ministers and find a way out of this extremely serious situation.”
Real catastrophe
Business minister Kate Dearden responded, stating the Government inherited a weak economy from the previous administration.
She went on to say this Government was committed to supporting hospitality through economic growth and will continue to review tax policy as part of its wider fiscal strategy.
She added: “They [previous Government] left deep economic scars on our economy from a decade of stagnant growth. We know hospitality thrives when our economy grows and wages rise and people have money to spend, which is why we’re absolutely committed to supporting them and working closely with them.
“There’s a wide range of factors when [the] Government needs to consider introducing new tax reliefs, whether they support wider Government objectives and [the] Government keeps all taxes under review as part of the policy-making process and the Chancellor will announce any changes to the tax system at fiscal events in the usual way.”
VAT cut call
Just last month (June), Chancellor Rachel Reeves urged the hospitality sector to work with the Government in driving growth while claiming “the best days are ahead”.
In a video address at the UKHospitality summer conference, Reeves thanked operators and acknowledged the tough trading conditions.
This came shortly after the launch of #VATsTheProblem - a campaign to cut VAT to 10% for hospitality, spearheaded by celebrity chef and pub operator Tom Kerridge and backed by a number of trade bodies.
The petition, which has a target of 1m signatures, currently stands at more than 260,000.
