Survey reveals wide public support for cut in hospitality VAT rate

Survey reveals wide public support for cut in hospitality VAT rate

Calls for the Government to slash the VAT rate for the hospitality sector have been supported by a large percentage of the public, according to a new national survey.

More than two-thirds of people polled in the study, conducted by OnePoll on behalf of Fourth Hospitality, said they want the Government to follow the lead of France, which lowered VAT charged to bars and restaurants in 2009.

The lowered rate currently stands at just 7% compared with the national standard VAT rate of 19.6%.

Ben Hood, chief executive of Fourth, said: "It is extremely powerful to see so many people (67%) in favour of such a move. I think some people in the hospitality industry will be surprised to see that this issue is really starting to resonate with consumers."

The results of the poll have been welcomed by key industry groups. Peter Thomas, chief executive of the British Institute of Innkeepers, the licensed hospitality trade's professional body, which is in favour of VAT cuts, commented: "In line with our members' views, we have been calling on the Government to support the trade with tax breaks and concessions, and we are delighted to discover this is something that is fully supported by the wider public.

"Furthermore, while we have always instinctively known that pubs are valued and highly regarded by the public, it's heartening to see this view reflected in such strong and validated consumer research."

The rationale for cutting VAT is that a reduction in VAT on food and drink sold in pubs and restaurants will actually create more revenue for the public coffers, through a combination of a number of factors, such as job creation and higher sales.

Nick Bish, chief executive of the Association of Licensed Multiple Retailers (a member of a trade campaign that wants to see VAT cut to 5% for the hospitality sector), said: "It is good to see that the great British public values the pub and sees it more than just a place to go - recognising that it has a part to play in solving some of the problems with the economy. Supporting the licensed hospitality and retail sector will bring positive results, especially in terms of pubs hiring more people, which in turn helps the Government's books and will be money well spent."

The survey, carried out in the wake of the March Budget, involved 2,000 interviews and points to a greater awareness of some big industry issues among the public, such as punitive tax policies and higher levels of pub closures.

It revealed that the great British pub is still held in high regard by the public, with 76% seeing pubs in a very positive light. Of these, 32% said ‘pubs were a great part of British social life and should be helped to survive'; 16% saw the majority of pubs as ‘well run and playing an important role in preventing under-age drinking and alcohol abuse'; and more than 27% described pub closures as having a ‘negative impact on local communities'.

Other Government tax policies also proved unpopular in the survey's results. The beer tax duty escalator, which would see a pint rising by a further 5p-10p, was voted ‘bad news for pubs' by 62% of respondents, with nearly 20% of these saying such increases would be ‘disastrous and will lead to job losses and pub closures'.

There was little support for David Cameron's plan for a minimum price for alcohol - less than 18% of respondents said the minimum pricing of alcohol will discourage problem drinkers. A further 36% said it was ‘bad news and will affect everyone'.

A 68% majority believed that there were problems with binge drinking and excessive alcohol consumption in this country, but only 20% saw supermarkets as irresponsible by loss-leading and selling alcohol cheaply with the causes of binge drinking and excessive alcohol consumption laid firmly at the feet of poor parenting and a lack of social skills.

A ‘general lack of social and personal responsibility in this country' (63%), the ‘failure of parents to teach children how to drink responsibly' (56%), and ‘excessive drinking of high alcohol products among young adults' (52%) were identified as the top three causes of binge drinking and excessive alcohol consumption.

When it came to smoking in pubs and restaurants, the Government's ban was deemed a success, with just 14% saying they visited less regularly because they or their friends smoked, against 70% who visited pubs and restaurants more regularly or the same amount. The majority were also in favour of the duty increases on tobacco products, despite some fears (20%) that it could ‘ultimately encourage people to buy on the black market or abroad'.

Finally, when it came to where the Government should look to raise money, the majority opted for ‘taxing the higher earner'. Asked if they were Chancellor how would they raise money, the top three suggestions were: tax the high earner (with footballers, millionaires and people earning £750,000+ coming top), introduce a Mansion Tax, and plug tax loopholes and catch tax and benefit cheats.

By Janie Manzoori-Stamford

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