Sir Gavin Williamson is calling for the Government to provide hospitality businesses with VAT relief, after many establishments face the threat of closure due to rising energy costs, national insurance contributions, and minimum wage increases.
According to recent data, one in five hospitality businesses fear closure within the next year due to a raft of Government policy which is stifling growth and causing job losses. Sir Gavin wants the Government to lower VAT to 10% to provide much needed relief.
Sir Gavin recently visited The Hartley Arms in Wheaton Aston, where licensees Ben and Faye Peace discussed how soaring energy bills, the rising cost of ingredients, as well as increase employment contributions, are creating a perfect storm whereby businesses are struggling to grow.
Ben Peace said: “Reducing the VAT rate from 20% to 10% would provide vital support for us at The Hartley Arms in Wheaton Aston. Like many rural pubs, we face rising costs for energy, food, drink, rent and staffing.
“A lower VAT rate would help improve cash flow, allowing us to invest in the business, retain jobs, keep prices more affordable for customers, and continue to serve as an important community hub.
“This change would strengthen the long-term sustainability of local hospitality businesses and support economic activity in rural areas. We have been proud to employ so many young adults from the local community, with the increase in living wage and NICS we are having to manage without their support.
“This has a knock-on effect on the level of service we can offer which may cause revenue to suffer should customers not return as a result. We currently employ 28 people all from the local community.
“Many pubs are currently surviving on the generosity of the owner operators. We have family collectively putting in 50-60 hours a week in the business without pay to avoid making a loss. It's just not sustainable.”
Sir Gavin said: “Hospitality businesses including The Hartley Arms are being strangled by the Government almost into submission due to rising National Insurance costs, minimum wage increases, and loss of relief.
“Pubs are at the heart of our communities – they are a space for people to meet friends, family, and socialise as well as contributing to the local economy.
“They are also the first rung on the career ladder for young people and in the midst of a youth employment crisis, it is absolutely astonishing that they would introduce measures to further exacerbate the problem.
“Hospitality businesses need help now, not tomorrow. That is why I am calling on the Government to lower VAT rates from 20% to 10% before more are forced to call last orders.”
