Stuart Anderson MP renews calls to support South Shropshire's Hospitality Sector
Calls to support South Shropshire's hospitality sector have been renewed by Stuart Anderson MP. He has urged the Government to permanently reduce the rate of VAT on food and hot beverages sold in pubs to 12.5%.
It comes as UKHospitality warns that the sector will incur an extra £1 billion of costs for 774,000 of its workers from April. As of that time, more businesses in the sector will become eligible for employer's National Insurance Contributions (NICs).
The change was announced by the Chancellor as part of the Autumn Budget. She said that the threshold at which employers start paying NICs will be reduced from £9,100 to £5,000-a-year.
In November, over 200 hospitality businesses warned that these changes will force some businesses to close - while others will have to drastically reduce their headcount and scrap plans to invest in renovations.
As reported by the Guardian in December, the number of pubs in England and Wales has fallen below 39,000 for first time. To reverse this trend, Stuart has said cutting the rate of VAT on food and hot beverages sold in their venues would be a "huge boost" to the sector.
After meeting with representatives of the sector in Ludlow, Stuart launched his campaign for VAT to be reduced in December 2024. More than 25 businesses from the area signed Stuart’s petition.
Stuart has now written to more than 160 pubs, bars and restaurants across South Shropshire about the campaign. Together, they support around 700 local jobs. Stuart is hoping to enlist their support for his campaign.
In his open letter to South Shropshire's hospitality sector, Stuart said: "Our hospitality businesses in South Shropshire are hugely valued community assets. You not only support local economies but provide valuable spaces for communities and generations to come together."
Each letter has a QR code (as shown on the left) linking directly to Stuart's petition. Businesses keen to sign straight away can access the petition below.
Stuart added that when VAT was previously cut between October 2021 and March 2022, as reported by Hospitality UK, 54% of businesses passed on the reduced rate of VAT in the form of lower prices for their consumers. Notably, more than 85% of pubs serve food.
UK Hospitality has estimated that a VAT cut could create 21,971 jobs across the West Midlands over a ten-year period - with additional turnover of £544 million. Importantly, the sector created one in seven new jobs between March 2009 and March 2020, which amounts to 542,000 jobs.
Stuart Anderson MP said:
"The UK has one of the highest rates of VAT for hospitality in Europe. To help the sector, the government must permanently reduce the rate of VAT on food and hot beverages sold in pubs to 12.5%. This would give pubs a fair playing field with supermarkets and increasing online sales. It would also allow the sector to pay higher wages, restrict price increases to customers, and invest in the local area. By doing so, it would encourage people to go out more for meals, buy hot takeaway food, or stay in one of the area's hostelries. As the government advances plans to accelerate growth, cutting VAT in this way could play an integral role if accepted by Ministers."
