Chef Tom Kerridge has urged Prime Minister Andy Burnham not to backtrack on comments made about addressing a VAT reduction for the hospitality industry.
During a visit to Manchester on Thursday (August 6), the chef and TV personality - joined by UKHospitality's chief executive Allen Simpson and Greater Manchester's former night time economy Adviser Sacha Lord - Kerridge said he was hopeful the former mayor of Greater Manchester was 'listening' and 'understanding' of the issues impacting hospitality amid a spate of closures since the pandemic.
Campaign for VAT cut
Mr Kerridge, who is behind the likes of The Hand & Flowers and The Coach in Buckingham and previously ran Manchester's Bull & Bear at the Stock Exchange Hotel, is currently spearheading a campaign urging VAT for hospitality to be reduced from 20 per cent to 10pc. The petition, called VAT’s The Problem - launched in July with support from UKHospitality, and has amassed over 300,000 signatures to date.
Just days into his new role, Mr Burnham addressed one of the issues affecting hospitality by announcing a cut to business rates for pubs, clubs and live music venues. Rates will be cut by 20pc from April next year with the new Prime Minister saying he hopes to 'bring back hope' across the country and 'protect pubs and local high streets'.
Kerridge confident in new government
Speaking to the Manchester Evening News about the campaign and early policy moves from the new Labour leader, Kerridge said he was 'confident' in the government under Mr Burnham's leadership and that the door is open to push for a VAT reduction.
"This is the first Prime Minister in a long time that has an understanding and feels like his finger on pulse for what it takes for communities and spaces to work through hospitality," Mr Kerridge said. "It feels like it’s someone who embraces and enjoys hospitality, having met him a couple of times and and the team around him, this is somebody who is much more connected with the understanding of going out, nightlife, socialising - whether its nightclubs, bars and city centres - and [has] an understanding of hospitality, and what it generates and what it brings.
"I am very comfortable and confident with the fact that it’s now a government that may well be listening and understanding of the plights of hospitality."
Business rates cut welcomed
While Mr Burnham has yet to address a VAT reduction for the sector, his lowering of business rates was seen as a generally positive move, and a step in the right direction. The discount will apply to nearly 32,000 hospitality businesses and is expected to save a typical pub around £1,100 annually, but will not be available to the very largest live music venues.
It follows the 5p cut in rates announced in Rachel Reeves' 2025 Budget and will come on top of the 15 per cent relief announced in January. It's estimated the move, which will cost around £100m annually. The cut will be funded through a review of reliefs for businesses that 'do not make a positive contribution to local communities' such as vape shops and a crackdown on online marketplaces that do not comply with tax obligations, No 10 said. The Prime Minister had previously pledged to raise taxes on out-of-town warehouses for online giants such as Amazon to help pay for cuts to rates for hospitality firms.
Kerridge calls for further action
"I think the movement within the first couple of weeks of trying to address something to do with business rates for pubs is a positive one," added Mr Kerridge. "I think it’s great, it’s good for pubs. It doesn’t address the bigger issue of the whole of hospitality, but what it does do is it shows there is an understanding that something needs to be done, it shows that there is an area that needs growth and needs support and they're trying to work out ways of doing it.
"The business rates is an interesting one, because I think there's been so much backwards and forwards over the last 18 months about the business rates structure, what’s happening and how it works, it shows that they way that they’re calculated isn’t really fit for purpose. Pubs are calculated slightly different to restaurants and different spaces, and places get penalised for higher turnover, but that doesn’t mean higher profitability. A new viewpoint on business rates would be great, the fact that as a government they’re talking about it so early doors shows that there is an open door that is ajar for us to have a further conversation about hospitality.
"VAT needs to be the main point of process because that is the one thing that affects the whole industry and the five issues that drop in are food inflation, utility bills, national insurance rises, business rates and minimum wage, and all of those things really do weigh heavy in hospitality and affects every single space. While business rates will help certain individual spaces, which is great and very positive, all those collective five forces that weigh heavily affect every business and VAT is the one that could help every business."
Burnham's previous support
During his campaign in Ashton-in-Makerfield, Mr Burnham backed calls to slash hospitality VAT from 20pc to 10pc in line with other European rates. But so far, as Prime Minister he has he targeted a temporary 0pc VAT cut specifically on household electricity bills rather than general hospitality VAT.
"When Andy was in his role here as mayor, that conversation came up and he’s been very supportive and vocal about that reduction in VAT for hospitality, so I’m very hopeful that is a continued conversation," Mr Kerridge said. "There will obviously be a lot in his in tray as you come in from being mayor into the Prime Minister, there’s a huge amount to deal with. There’s so many things that drop in but it’s nice to know that we are part of the agenda that this conversation is going to be had.
"If you’ve already talked about it and given support of its as Mayor, the last thing you want to do is then do form of U-turn, you need to be proactive, but the conversations have been very proactive about it and Manchester is prime example of how cities and spaces and communities and places can thrive on an understanding of culture, nightlife, hospitality. Manchester is a wonderful example of a city that is built on communication and people hanging out together on social networks, whether that's local pubs that people continue to go to or a thriving food scene that’s gone from street food to Michelin-starred restaurants.
"Andy Burnham has been a big part of Manchester’s success as overseeing parts of it as Mayor and trying to piece all those pieces together. If you can take the Manchester model and piece it into something that is country wide that would be phenomenal."
