Stuart Anderson MP Supports Ludlow's Hospitality Sector
Support for hospitality is being requested by Stuart Anderson MP, who has presented a petition to the Chancellor, calling on the government to permanently reduce the rate of VAT on food and hot beverages sold in pubs. It follows a meeting on Monday, 18th November with representatives of the hospitality sector in Ludlow and is part of Stuart's long-term campaign to support the sector.
More than 25 businesses from the Ludlow area have signed Stuart’s petition, including: The Queens; Kin Kitchen; Csons; Sourced Pizza; Charleton Arms; The Fish House; Taste @ No 1; The Bull Ring Tavern; The Bakehouse; The Compasses; Mortimers; Café V; Jup Jup Thai; The French Pantry; The Corner House; The Feathers Hotel; The Bull Hotel; Aragons; The George; The Buttery; The Blue Boar; Bill’s Kitchen; The Angel; The Cottage Café; Parkway; The Church Inn; and Twigs.
Currently, the standard rate of VAT (20%) applies to food, drinks, and tickets. This means that the UK has one of the highest rates of VAT for hospitality in Europe. In his letter to the Chancellor, Stuart has called on the government to introduce a 12.5% reduced rate for the hospitality and tourism sectors to support businesses and jobs.
In Ludlow and the surrounding areas, the leisure and hospitality sector support around 700 jobs. The previous government reduced the rate of VAT to 12.5% in October 2021 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs. 54% of businesses passed on the reduced rate in lower prices for consumers.
The relief ended on 31st March 2022 when demand for goods and services in these sectors increased. Since then, hospitality businesses have continued to face increased costs with energy prices and now, as set out in the Autumn Budget, a “double whammy” of a 1.2% hike in National Insurance contributions (NICs) combined with lowering the threshold at which companies start making contributions from £9,100 to £5,000.
As recently reported by the Guardian, fifty pubs a month closed for good across England and Wales in the first half of this year. Now, more than 200 pub and restaurant bosses have warned that the new tax rises will "unquestionably" cause closures and job losses.
Prior to the Budget, Stuart had called on the Government to support our pubs and restaurants by continuing the last government's package of support for pubs - including implementing the Brexit Pubs Guarantee and freezing alcohol duty.
In his letter, Stuart added that the hospitality industry is not asking for special treatment but a fair playing field with supermarkets and online sales. This would allow the sector to pay higher wages, restrict price increases to customers, and invest in the local area. It would encourage people to go out more for meals, buy hot takeaway food, or stay in one of the area's hostelries.
UK Hospitality, the national trade association for hospitality businesses, has estimated that doing so could create 21,971 jobs across the West Midlands over a ten-year period - with additional turnover of £544 million. Notably, the sector created one in seven new jobs between March 2009 and March 2020 which amounts to 542,000 jobs.
Over 85% of pubs serve food. It is expected that businesses will choose to pass at least some of the saving from a cut in VAT on to customers, resulting in increased spending in these sectors. A study by YouGov, commissioned by UK Hospitality, found that 79% of the public were in favour of a reduced rate of VAT for hospitality and tourism.
Stuart Anderson MP said:
"Across my constituency of South Shropshire, historic market towns like Ludlow provide a stunning backdrop for our pubs and restaurants. So, it was excellent to meet representatives from Ludlow’s hospitality sector. This sector has huge potential for future growth, helping to unlock rural prosperity, upskilling local people, and bringing communities together. Yet, the representatives that I met have told me that they continue to be held back by increased costs and excessive taxation. They have said that cutting the rate of VAT on food and hot beverages sold in their venues would be a huge boost – helping to keep prices down and supporting jobs in our rural economy. They are not asking for special treatment but a fair playing field with supermarkets and increased online sales. I hope the Chancellor will accept this request.”
