Speaking at a press briefing held at the Blue Boar pub in Westminster, London, on Tuesday 20 October, Simpson said he was confident the sector would eventually secure a VAT reduction.
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However, he warned the tax cut may not be secured in the upcoming Budget, set to take place next week, and urged the sector to keep fighting.
“A VAT cut is the single biggest and simplest lever that [the Government] could pull.
“At some point, in the near term, it is highly likely.
“Whether or not we’ll win it this time or in the future, we have to carry on campaigning, because I think we will get it,” he told The MA.
Simpson said he was increasingly confident the Government would address the wider damage inflicted upon hospitality over the past two years, pointing to the business rates cut due to take effect in April 2027.
Wild promises
He asserted the Government had avoided making “wild promises”, instead acknowledging it would not be able to deliver everything immediately while setting out its intention to begin making changes.
“They’ve said, ‘We’re going to fix it. We’re not going to be able to do everything we want in this Budget. But over time, you’ll see where we’re going.’
“And the acknowledgement of the mistake, I think, is key,” he added.
With several other European countries having already introduced similar measures, he added he believed the Conservatives could eventually support a VAT cut, too.
The comments come as support for the #VATsTheProblem campaign, spearheaded by UKH and celebrity chef Tom Kerridge, continues to grow.
Calling for a VAT reduction from 20% to 10% for hospitality, the campaign had exceeded 400k signatures at the time of publication.
When asked what would make for a less disappointing Budget for hospitality, Simpson said a “material tax cut” and action on business rates were essential.
Massive advance
“Having a Budget that isn’t directly negative is a massive advance on the past,” he continued.
“The past two years, we have seen our sector, specifically, hammered in order to protect other sectors. If we don’t see that this year, that’s better than we have had.”
Simpson also stressed finding a solution to the pressure on hotels’ business rates remained a “red line” ahead of the fiscal address.
Employment was another key concern raised, with job losses and rising wage costs adding to pressure on operators.
Simpson highlighted the scale of hospitality’s employment losses over the past two years, comparing them with those experienced by workers during the miners’ strikes.
With hospitality’s crucial “golden quarter” fast approaching, he warned job losses would “accelerate” if the Budget failed to deliver targeted support and consumer spending softened.
However, the chief executive said the Government had made MPs fully aware of the challenges facing the sector, adding: “All MPs get it.”
- Look out for The Morning Advertiser’s live coverage of the Budget on Wednesday 28 October, including our live blog.
