Hospitality Sector VAT: Local Economies, Employment and Growth Debate
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Josh Dean
Main Page: Josh Dean (Labour - Hertford and Stortford)Department Debates - View all Josh Dean's debates with the HM Treasury
Hospitality Sector VAT: Local Economies, Employment and Growth
Josh Dean Excerpts(1 day, 20 hours ago)
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Josh Dean (Hertford and Stortford) (Lab)
It is a pleasure to serve with you in the Chair, Dr Huq. Whether it was told to me by Ruby and Jordi, who run Bean and Gone in Hertford, or by the team at the Saracens Head, including Laura and everyone pulling pints, what I have been told by businesses is consistent: costs are rising and margins are thinner. Among a number of pressures, VAT was mentioned consistently.
When our businesses look to their European counterparts and see the comparative rates of VAT, it is no wonder they ask why VAT is treated so differently, and is a heavier burden, in the UK. I welcome measures in the Budget to provide relief on business rates, which come up in every conversation I have with businesses, but I understand why some hospitality business owners are asking whether those measures go far enough to address the challenges that they face.
The question is not simply whether we should consider a reduction in VAT, but how that change should be designed. A blanket reduction may sound attractive, but we must consider who it would benefit most. If a cut simply increases the margins of large, multinational chains, we will have missed an opportunity and let our businesses down.
In our towns and villages—mine is a semi-rural community—our hospitality businesses are essential. They provide spaces for people to gather and jobs for young people. They act as anchors for our community. I support a targeted approach to ensure that we support SMEs in the hospitality sector to continue to provide that space for people in our community. When those businesses struggle, the consequences are felt far beyond their four walls: jobs are lost, supply chains are weakened and our towns become less vibrant.
I have had the opportunity to meet representatives of many such businesses and they are both ambitious and community-minded. Members of Parliament may come and go, but those businesses have been in place for years—for decades or even longer. They deserve a tax system that recognises the value that they create, that supports them to provide employment opportunities, and that helps our businesses and communities thrive.