Sacha Lord calls for hospitality VAT cut

The night-time economy adviser for Greater Manchester, Sacha Lord, outlined a five-point plan at the annual Labour party conference in Liverpool yesterday (8 October) to ‘safeguard the future’ of the hospitality sector.

The plan would start by lowering the current 20% VAT rate the sector pays – that is, bars, clubs and restaurants – to 12.5%, which was the rate it was set to during the Covid-19 pandemic, until March 2022.

This would also bring the UK’s rate closer to what it is in Europe where in many countries it often falls below 10%.

Lord said: “Nearly 5,000 licensed premises in the UK closed in the year to March 2023. This has a devastating effect on the communities they serve and on the economies of the towns and cities where they were based.

”The 12.5% VAT rate for the hospitality industry was a lifeline for the sectors and it must be reinstated either by this government or the next one, which I hope will be led by Sir Keir Starmer. The people’s party should implement policies that help the venues, pubs and places the people frequent.”

Lord, who is also behind Manchester’s Parklife festival and co-founder of The Warehouse Project, also wants an overhaul of the ‘outdated and unfair’ business regime, to devolve licensing laws, and to reform the business rate system so venues that ‘provide social and community good’ are well supported and encouraged.

Other measures in his proposal include handing more power to the Office of Gas and Electricity Markets (Ofgem), and local and regional authorities.

It also laid out steps to ensure hospitality’s future by recommending a reform of the curriculum, so young people can view a career in the industry in a more serious light. A T-level in hospitality would be established, alongside the existing T-level in catering.

Lord added: “Businesses like these form part of the social glue that binds our towns and cities together. I have set out a plan to ensure they are viable today, tomorrow and for many years to come.

”The hospitality industry does not want or expect handouts, but it does need a business and regulatory environment in which it can flourish after a period of unprecedented economic hardship”.

In March, Lord called on the UK govt to rethink its energy support. And in February, he launched a charity to help disadvantaged young people pursue a hospitality career in the UK.