Northampton pub landlady says business rates cut 'won't save hospitality' as she calls for VAT reform
A Northampton village pub landlady has welcomed the Government's decision to cut business rates for pubs but says the move "doesn't go far enough" to tackle the financial pressures facing the hospitality industry.
Miranda Richardson, who runs the Squirrels pub in Duston village, said Prime Minister Andy Burnham's announcement of a 20 per cent reduction in business rates for pubs, clubs and live music venues was a positive step, but argued that cutting VAT for hospitality would make a far greater difference to struggling businesses.
Under the plans, announced last week, nearly 32,000 pubs, clubs and live music venues across England will receive a 20 per cent reduction in their business rates bills from April next year. The Government estimates the typical pub will save around £1,100 a year as part of a package worth around £100 million. Prime Minister Andy Burnham said the measures were designed to protect "the beating heart of our communities".
However, Ms Richardson said the average monthly saving would quickly be swallowed up by rising costs.
Speaking to Chronicle & Echo, Miranda said: “Any reduction is welcome – nobody in hospitality is going to turn it down,
"But it isn't groundbreaking. One supplier increases their prices, you need an extra member of staff for a busy period, or something needs repairing, and that saving has gone.
"It's encouraging that the Government is recognising the pressures pubs are under, but they're still not listening to what will make the biggest difference."
Miranda, who now serves as an ambassador for the British Institute of Innkeeping (BII), said a reduction in VAT across the hospitality sector would provide far greater support than business rates relief alone.
The pub boss said: “It's VAT that makes the difference. Business rates are only one part of the problem. Hospitality businesses are facing higher wages, National Insurance, supplier costs, food inflation and energy bills.
"When you're barely making a profit, it only takes one unexpected cost and you're back to square one."
Miranda is backing the BII's #VATsTheProblem campaign, which is calling on the Government to reduce VAT for hospitality from 20 per cent to 10 per cent. The campaign argues the UK has one of the highest VAT rates for hospitality in Europe, compared with 10 per cent in France, Spain and Italy and seven per cent in Germany, and says a lower rate would help protect pubs, restaurants, cafés, hotels and nightclubs while supporting jobs and local high streets.
Miranda said: “We're paying 20 per cent VAT while countries like France and Germany are charging around half that for hospitality.
"When you look at the tourism those countries attract, you have to ask why we're making it so much harder for businesses here. That's one of the reasons pubs keep closing.
"It's not just pubs that are struggling. Coffee shops, restaurants and other hospitality businesses are all under the same pressure. A hospitality VAT cut would help the whole sector."
Miranda said she would continue campaigning through the BII, including lobbying ministers and taking part in media campaigns ahead of the autumn Budget.
She said: "I'll keep going back to Parliament and keep campaigning because that's where the real change will come.
"We'll be back down with the Government again, lobbying in Parliament as we have done already."