Plaid Cymru urges hospitality VAT cut to bring growth beyond London and Manchester
Liz Saville Roberts warns coastal communities risk being “forgotten” without action in the Autumn Budget
Plaid Cymru’s Westminster leader has urged the Prime Minister to cut VAT for hospitality in the Autumn Budget, warning that the current 20% rate is holding back businesses and economic growth in rural and coastal communities.
Speaking at Prime Minister’s Questions today (Wednesday 9 September), Dwyfor Meirionnydd MP Liz Saville Roberts highlighted the experience of Yr Heliwr, a community-owned pub in Nefyn, which reinvests its profits back into the local community.
Hospitality businesses in the UK currently pay 20% VAT, compared with 10% in countries including France, Spain and Italy.
UKHospitality has called for VAT for hospitality to be reduced to 10%, describing a lower rate as the “single most important thing” the UK Government could do to support the sector.
The industry body says the UK has one of the highest hospitality VAT rates in Europe, with an average rate of 12.8% across Europe compared with 20% in the UK.
A YouGov poll commissioned by UKHospitality found that 79% of the public support a reduced rate of VAT for hospitality and tourism, compared with 17% who back retaining the current 20% rate.
Speaking in the House of Commons, Liz Saville Roberts MP said:
“Yr Heliwr in Nefyn is a community-owned pub and it’s buzzing with events, fuelled by local beers and food. I have to declare an interest - I have shares in Yr Heliwr, and it makes my husband very happy indeed.
“Supporting businesses like Yr Heliwr is of course key for economic growth in coastal areas - but they’re held back by 20% VAT, while hospitality in France, Spain and Italy pays just 10%.
“Will he have a word please with the Chancellor before the Autumn Budget and cut VAT for hospitality to prove that the postcodes furthest from London and Manchester will not be forgotten in his drive for growth?”
Prime Minister Andy Burnham responded:
"As the Honourable Lady might know I am something of a pub person myself. In my first week in office I made a decision to cut business rates for pubs. I think we need to go further to support hospitality. I can't commit to what she is saying today at this despatch box but I would say that she should wait for the budget. We are keen to support high streets and hospitality up and down the country in England, Scotland, Northern Ireland and in Wales too."
Lois Povey, Community Officer at Yr Heliwr, said:
"Running a business is difficult enough with high VAT costs, but as a community pub where every penny goes back into the community, even a reduction in VAT which might look small on paper would make a significant difference to enterprises like ours.
“High VAT creates major challenges and puts additional pressure on us. It means less of our money can go back into the community, which goes against our whole purpose as a community pub.
“We face many other pressures too, including increases in the National Minimum Wage, so every penny matters. This doesn’t just affect the business - it has a real impact on the community here in Nefyn and the surrounding area.”