Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment has she made of the potential merits of reducing VAT to 10% for hospitality businesses in Wales.

VAT is a broad-based tax on consumption. It is a reserved tax and applies across the UK, with the 20 per cent standard rate applying to most goods and services. Reduced rates of VAT come at a significant cost to the Exchequer and reduce the revenue available for vital public services. Any reduction in tax revenue would mean higher borrowing, lower spending, or increases in other taxes.

HMRC estimates that reducing the standard rate of VAT to 10% on all accommodation and food and beverage services would cost approximately £11 billion a year.

The Government is already supporting hospitality through targeted measures, including permanently lower business rates multipliers, a £4.3 billion business rates support package, and the temporary Great British Summer Savings scheme, which will reduce VAT from 20 per cent to 5 per cent on eligible family attractions and children's menu meals between 25 June and 1 September.