Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of permanently reducing the rate of VAT for (a) food and (b) beverages on (i) pubs and (ii) the wider hospitality industry in City of Durham constituency.

The VAT reduced rate for the hospitality sector was a temporary measure designed to support the cash flow and viability of sectors that have been severely affected by COVID-19. It was appropriate that as restrictions were lifted and demand for goods and services in these sectors increased, the temporary tax reliefs were first reduced and then removed in order to rebuild and strengthen the public finances.

According to OBR forecasts, VAT will have raised approximately £135 billion in 2021/22, helping to fund key spending priorities such as important public services, including the NHS and policing. In addition, this request should be viewed in the context of over £50 billion of requests for relief from VAT received since the EU referendum.

While there are no plans to reduce the rate of VAT on food, beverages, pubs or the wider hospitality industry, the Government keeps all taxes under review.