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Parliament debate: 'Special treatment' need for hospitality over VAT

Published:  01 February, 2024

There has been resounding support for hospitality business in parliament this week as MPs reported that the sector is “screaming out that VAT is too high”.

The comment was made in a Westminster Hall Debate yesterday (31 January) on ‘fiscal support for the hospitality sector’, where several MPs made their feelings plain.

This included organiser of the debate, Alyn Smith, MP for Stirling (Scottish National Party), who echoed broad agreement among the MPs present that the sector is in need of further backing by the government.

He said: “Am I looking for special treatment for the hospitality sector? Yes. I think they need it and I think they deserve it. They need it because of unprecedented economics times we’re living through and they deserve it because these businesses are not just part of our economy, they’re a part of our society. They’re community hubs, they contribute to our sense of place, they keep our high streets busy.

“If you remember only two words from me today, it is cut VAT.”

Tobias Ellwood, MP for Bournemouth East (Conservative), also added to the chorus: “My simple, but critical call to action today is please listen to the hospitality sector, who are screaming out that VAT is too high. Please reconsider the decision to raise VAT to 20%, otherwise you will face ever more business closures and subsequently raise less tax for the Exchequer.”

Several other MPs also echoed these comments on greater support for the hospitality sector as businesses close at a rapid pace. Cutting VAT is just one of the measures currently being asked for by UKHospitality ahead of the upcoming Spring Budget. Others include addressing business rates increases due in April and wider reform of these rates thereafter.

Kate Nicholls, chief executive of UKHospitality, said: “It was excellent to see so many MPs attend the debate today, responding to our calls and those of hundreds of hospitality businesses that urged them to do so.

“It’s evident from the debate that MPs recognise the challenges facing the sector and back our calls for urgent action. There was particular cross-party support to lower the rate of VAT and reform business rates – all priority asks of ours.”

Attended by all the major UK parties, other voices heard at the debate included Tim Farron, MP for Westmorland and Lonsdale (Liberal Democrat), who said: “I really hope the Minister will listen and bring in the actions we need. All we’re asking you to do, Minister, is back a sector that will boost our economy to the tune of billions more.”

Meanwhile, Rachael Maskell, MP for York Central (Labour), described the hospitality sector as sitting at “the sharp end of all markets sensitivities. It feels every economic challenge acutely. The sector needs support”.