Lead
A group of leading chefs and restaurateurs, spearheaded by Tom Kerridge, has stepped up its campaign for a sector-specific VAT cut, winning tentative backing from the Labour mayoral candidate Andy Burnham. Under the banner "VAT's the problem," the campaign publicly launched on Wednesday, aiming to persuade the government to reduce VAT on hospitality from 20% to 10% in line with rates across much of Europe.
The move comes as new survey data indicates that nearly a quarter of UK pubs, bars, and restaurants are losing money, with the industry citing high taxes, rising costs, and what it describes as unfair levels of taxation.
Coverage comparison
Reports from The Guardian show a strong consensus on the core facts: Burnham has endorsed the VAT cut, European rates are lower, and the industry is struggling. One report quotes Kerridge expressing hope that Burnham becomes prime minister, while another highlights the industry's criticism of a recent temporary VAT cut on children's meals. A third focuses on the survey data and the estimated cost of a permanent VAT cut.
All reports agree that the VAT rate for hospitality in the UK is currently 20%, compared with 10% in France, Spain, and Italy, and 7% in Germany. The estimated cost of a permanent cut to the Treasury is put at between £10.5bn and £13bn, with one report giving the lower figure of £10.5bn-£12bn.
The tone varies: one report is more positive towards Burnham and the industry's campaign, while another is more critical of the government's response, describing a temporary VAT cut as a "token gesture" and "laughable." A third adopts a neutral tone, presenting facts and different perspectives.
Key claims
- Andy Burnham's backing: The Manchester mayor and Labour candidate in the Makerfield byelection has called for the VAT rate on hospitality to be cut from 20% to 10%. Burnham is expected to challenge Keir Starmer's leadership if he wins the byelection. Kerridge said of Burnham: "Andy Burnham has backed a cut to VAT and as Manchester mayor he represents one of the most vibrant and exciting cities in the UK with a growing food scene. This is somebody who understands nightlife, food, hospitality and entertainment, he sees it as the lifeblood of creativity." Kerridge added: "It's looking like there may be a future leadership contest and this is someone the whole of hospitality should get behind."
- Industry struggles: Survey data commissioned by the industry group shows 23% of UK pubs, bars, and restaurants are losing money, a significant jump from 15% three months ago. One in six businesses said they run the risk of going bust within 12 months, while 5% said they are not financially viable. The industry attributes its woes to hikes in business rates, employer national insurance, the minimum wage, and rising energy bills and food inflation. Kerridge said venues were closing at a rate of 21 a week.
- European comparison: France, Spain, and Italy charge 10% VAT on hospitality, Germany charges 7%, and the Republic of Ireland is due to lower its rate from 13.5% to 9% for food-led businesses. The UK rate is 20%, compared with a European average of 12.8%.
- Treasury cost: The government's temporary VAT cut on children's meals from 20% to 5% between 25 June and 1 September was announced by Chancellor Rachel Reeves as part of a "Great British summer savings scheme." The move was met with ridicule from industry figures, with Chris Jowsey, chief executive of Admiral Taverns, calling it a "joke" and the resulting discount "so small it's embarrassing." One Kensington restaurant, The Blue Stoops, launched a £25 "children's" menu featuring wild Burgundy snails and anchovy butter toast, with a dessert called The Tax Break Tart, as an "enterprising interpretation" of the scheme.
Perspectives
Tom Kerridge and the campaign: The restaurateur and BBC presenter, whose pubs hold three Michelin stars, argues that the UK's hospitality culture is "the best in the world" but that the industry is being "hit with unfair levels of tax." He supports Burnham's bid for leadership and rejects Nigel Farage's rival proposal to cut VAT, which Farage would fund by reinstating the two-child benefit cap. Kerridge said: "This is an easy photo opportunity for Nigel Farage to stand there with a pint and take advantage. Funding it by reinstating the two-child cap would push more children into poverty, which I do not support."
The government's position: Chancellor Rachel Reeves has introduced a temporary VAT cut on children's meals, which the government says is part of a scheme to support struggling venues and ease pressure on families. The measure has been criticised by industry figures, who contrast it with the £5bn in extra costs they say have been loaded on to pubs, bars, hotels, and restaurants since Labour returned to power in 2024.