Tobias Ellwood, the MP for Bournemouth East, made the intervention in the House of Commons following the Budget earlier this week. He proposed that the Chancellor reduce the level of VAT on hospitality from 20% to 10%, as was done to support operators during the pandemic.
He said: “Tourism destinations were affected, such as Bournemouth, because of the pandemic. Grateful, of course, for that Government intervention then. But as hospitality recovers today, it’s hit by the perfect storm of inflation driving up wages, higher fuel prices and, of course, increased utility costs.”
Ellwood noted a petition on the UK Government Parliament website, which has more than 12,000 signatures and calls for the VAT on Hospitality to be reduced 10% so as to allow businesses in the sector to 'survive the storm'.
“I hope the Treasury will do the maths, will lower VAT, and allow hospitality operations to survive and indeed build and grow,” he added
Ellwood's comments were welcomed by Sacha Lord, the night time economy advisor for Greater Manchester, who thanked him for 'standing up and speaking out' for the sector.
“This single intervention would help the whole sector across the UK,” Lord said.
“It would save businesses, and it would save and create jobs.”
Chancellor Jeremy Hunt delivered what he billed as his ‘Budget for growth’ on Wednesday (15 March). In it, he announced measures including an extension of the Energy Price Guarantee for households; substantial changes to childcare; and major reforms to support people back into work.
However, in a blow for hospitality, he fell short of addressing some of the main challenges directly facing the operators, with the only help targeted at the sector being an extension of draught relief from 5% to 9.2%.
