Luke Johnson, the serial restaurant investor, has called on the whole hospitality industry to come together to campaign for a cut in the level of VAT.
Speaking at M&C Report’s sister publication Restaurant Magazine’s R200 conference yesterday, Johnson, whose investments include Giraffe, Feng Sushi, Ego and Patiserrie Valerie, said that the sector could gain results if it lobbied as one.
He said: “This is not a fantasy, this can be done. All trade bodies should be spending time on this issue. The larger chains are mad not to be interested in this subject. A cut in VAT has been shown to work abroad. The cut gained in France has transformed the industry there.”
Johnson said that he had already held talks with government figures on the subject of a VAT cut and these talks were continuing behind the scenes, with “senior figures within the industry were slowly getting on board”.
When asked if there should be a specific VAT figure that the industry should be campaigning for, such as 10%, Johnson agreed that a targeted level would be beneficial during lobbying.
British Hospitality Association (BHA) chief executive Ufi Ibrahim told delegates that the association continued to have “positive” meetings with the Treasury about the call to reduce VAT for the industry.
Ibrahim referred to an independent study carried out by Deloitte, which put together 28 case studies from around the world showing the impact of a reduction in VAT on a country’s economy, including its role in creating jobs.
Ibrahim said that Treasury ministers were currently looking at the detail of the research, which includes a dissection of the VAT model in the UK.
She said: “We have our foot in the door and hope to have further meetings going forward.”
In February this year, the Publican’s Morning Advertiser, M&C Report’s sister publication, launched its Thrive on Five campaign, which is calling for a reduction in VAT to 5%
The campaign has already gained the support of leading industry figures such as JD Wetherspoon chairman Tim Martin, and influential French leisure entrepreneur and lobbyist Jacques Borel.
Speaking at the MA250 business conference for multi-site operators earlier this year, the man behind the 5.5% VAT cut for the hospitality sector in France claimed that a cut could be in the UK pre-Budget report in October 2013, with implementation by 7 April 2014 — if the sector fully got behind the lobbying of government.
Borel said that the VAT decrease would create between 140,000 to 320,000 jobs in the UK hospitality sector.