Hospitality Sector VAT: Local Economies, Employment and Growth Debate
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Brian Leishman
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Hospitality Sector VAT: Local Economies, Employment and Growth
Brian Leishman Excerpts(1 day, 20 hours ago)
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Brian Leishman (Alloa and Grangemouth) (Lab)
It is a pleasure to have you in the Chair, Dr Huq. I thank my hon. Friend the Member for Gower (Tonia Antoniazzi) for being a super sub and introducing the debate.
I also thank all the publicans from across Alloa and Grangemouth, but especially Craig and Greg from the Royal Oak in Alloa for their time and for telling me about the impact that 20% VAT has on their business. Of course, hospitality venues must deal with more issues than just VAT. Those include soaring business rates, which Scottish pubs do not get relief from, the increase in alcohol duty, and crippling energy rates.
There is no doubt about it: the pub game is extremely tough. In Scotland, a pub closes on average every four and a half days. This year, that amounts to roughly 600 jobs lost. It is widely acknowledged that independent pubs often struggle to compete with the industry big guns such as Wetherspoons and Greene King. Those chains can negotiate lower prices for products and absorb loss leaders, and their profit and loss accounts are more able to sustain the cost of overheads.
With VAT at 20%, many independent pubs have to put prices up or cut costs. That may mean reducing opening hours, closing for full days or, sadly, job cuts. It definitely means being unable to grow their business. Quite simply, pubs in my constituency and all over Scotland need help. Reducing the VAT rate would give venues much-needed “breathing space”—something that means a lot to my Chancellor. Businesses could employ more staff and boost local economic growth—something that means a lot to our Prime Minister.
Alloa and Grangemouth has more than 550 hospitality establishments, with more than 3,200 people employed, bringing more than £100 million of annual economic value. Pubs and restaurants are essential to life in Alloa and Grangemouth and all of Scotland. That is why I support calls to lower VAT for hospitality businesses. Minister, let’s get behind these businesses and help them grow and thrive.