'Loosen the purse strings': Tom Kerridge urges VAT cut to save struggling hospitality sector
The restaurateur, 52, told LBC's Tonight with Andrew Marr that all operators in the sector were being crushed by "incredibly high costs", with "many operating on costs equal to 100% of their turnover"
Celebrity chef Tom Kerridge is calling on the government to reduce VAT for hospitality industry to save struggling businesses in the sector.
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The restaurateur, 52, told LBC's Tonight with Andrew Marr that all operators in the sector were being crushed by "incredibly high costs", with "many operating on costs equal to 100% of their turnover".
To help the numerous floundering pubs, bars and restaurants, Kerridge demanded that the Treasury "loosen those purse strings" and cut VAT so its is line with the rest of Europe.
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"Most operators in the hospitality industry, whether it be a coffee shop or a restaurant. They are all operating on incredibly high costs," the chef said.
"Food inflation has gone up, national insurance, minimum wage. There are so many different business rates, so the margins have been completely eradicated.
"There are so many things this Government needs to understand, and it does need to pay attention. The Treasury needs to start loosening those purse strings."
British hospitality businesses currently pay 20 per cent in VAT, while the average on the continent 9 per cent.
The sector, which is the fifth-biggest industry in the UK and the third-largest employer, has faced a battering from the triple blow of a rise in the minimum wage, increases to business rates, and surging energy prices due to the Middle East conflict.
It has already led to 110,000 jobs being cut and warnings of widespread closures across the country.
"The costs are absolutely increasing. The hospitality industry is built upon a supply chain and when those costs go up, the price of the products we are producing go up," Mr Kerridge said.
In her November Budget, Chancellor Rachel Reeves scaled back business rate discounts that have been in force since the pandemic from 75% to 40% - and announced that there would be no discount at all from April.
The government has offered some relief by reducing the "multiplier" used to calculate business rates.
But at the same time the Treasury has readjusted the rateable values of commercial property, meaning some businesses will be faced with bigger bills overall.
Asked why the Chancellor should give his industry a bailout, Mr Kerridge said: "We are a growth sector. It's one that brings long-term tax revenue. While there might be a short, painful period in terms of revenue, the long-term availability of reinvestment and growth is there.
"In turn, that has a knock-on effect which is positive for everyone else that comes into this industry. There are over 5 million people affected by hospitality through employment.
"It's an investment and growth process rather than just a bailout."