Mixed reactions from hospitality businesses following chancellor's VAT cut and voucher scheme

Millie Milliken

Millie Milliken

09 July 2020

While food-focused pubs, bars and restaurants have welcomed the announcement, wet-led venues and breweries are calling for more help from the government

Rishi Sunak put forward his plans for the hospitality and tourism industries yesterday (8 July 2020) in an announcement that included reducing VAT on food to 5% for six months, a food voucher scheme for the month of August, as well as a Job Retention Bonus and and Kickstart scheme for employers.

Trade body UKHospitality was congratulatory of the chancellor in his decision. It tweeted: 'The measures announced today are extremely positive and they should give many businesses in our sector much-needed help to get going again in earnest. We thank [Rishi Sunak] for recognising the importance and value of hospitality, and for acting so decisively.'

The new measures will hopefully be a source of confidence for the public when it comes to visiting pubs, bars and restaurants. However, operators of venues which don't serve food have been vocal about their disappointment over the VAT cut and 'Eat out to help out' voucher scheme ignoring the sales of drinks.

The new eating-out discount will be a great encouragement for customers to support the nation’s pubs at this vital time

Nick Mackenzie

'The new eating-out discount will be a great encouragement for customers to support the nation’s pubs at this vital time,' said Nick Mackenzie, chief executive of Greene King. 'While the cut to VAT on food is great news for the hospitality sector, it’s disappointing that it doesn’t extend to beer, given the heavy tax burden on brewers.'

The British Beer and Pub Association (BBPA) also recognised that while the chancellor's 'Eat out to help out' scheme would encourage pub goers back to their locals, for pubs whose revenue is more drinks led, 'the announcement today provides less help'. 

The Society of Independent Brewers (SIBA) has, this morning, released a letter in support of small pubs and breweries for people to send to their MPs. 

Jonathan Downey of Hospitality Union has been critical of yesterday's announcement, particularly in regards to the scheme benefitting chain groups over small independents: 'The Chancellor's economic stimulus today is great news for chains, large groups and those that least need the help. Not so good for the smaller, independent operators,' he tweeted.

Sheffield bar Public also voiced disappointment on Twitter: 'There’s a grand total of 13 days (Mon-Wed) in August where the 50% (up to a tenner) voucher scheme applies. The 5% VAT for "hospitality" doesn’t apply to alcohol. So, for us, and for many many other bars and pubs it’ll mean almost nothing.'

The pub and brewing sector has huge potential to create thousands of new jobs and employ more people, but to do this it needs to be thriving, not just surviving

Emma McClarkin

Reaction to the Kickstart and Job Retention Bonus schemes was more positive.

'As a leading apprenticeship employer, with a proven track record of helping disadvantaged young people build their careers in hospitality, the new kickstart scheme and the support for apprenticeships are also very welcome,' said Greene King's Mackenzie.

Emma McClarkin, cheif executive of BBPA was also complimentary of the schemes: 'Our pubs directly employ 600,000 people – 43% of which are under 25, making them a vital source of employment for young people in communities across the UK. We therefore welcome the "kickstart job scheme" announced today for young people on Universal Credit.'

However, she pointed out that in order for pubs to employ staff they need to be operating healthily: 'The pub and brewing sector has huge potential to create thousands of new jobs and employ more people, but to do this it needs to be thriving, not just surviving. This will require more support in the medium term directed at all pubs and brewers so they can help lead with the economic recovery. These measures include a significant cut to beer duty to bring the UK in line with other European countries who pay far less tax on beer, and a fundamental review of the business rates system so that pubs no longer pay an unfair share of them.'

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