Celebrity chef Tom Kerridge has made a direct appeal to Andy Burnham, the expected next Prime Minister, to halve VAT for the hospitality sector, arguing that urgent action is needed to stem the closure of 21 hospitality businesses every week.
Kerridge's Appeal to Burnham
Kerridge said he is “very hopeful” that Burnham will reduce VAT from 20% to 10% for pubs and restaurants, after the former Mayor of Manchester expressed support for the idea. The chef revealed he had spoken to Burnham’s team about the tax cut, leaving the industry increasingly optimistic given Burnham is expected to replace Sir Keir Starmer as PM next month.
“We will keep the conversation going and ensure he doesn’t do a U-turn,” Kerridge told the Mirror. “We are very hopeful. From my experience with Andy, we know he is a huge supporter of hospitality. He understands that hospitality is the lifeblood, the beating heart, of communities.”
Kerridge also praised the Mirror's Your Pub Needs You campaign, calling it “magic”.
Industry Calls for VAT Reduction
The hospitality sector argues that halving VAT would provide much-needed breathing space after a wave of cost hikes, bringing the UK in line with many other countries. However, the Treasury says it would cost more than £10 billion in lost tax receipts. Tax expert Dan Neidle branded the move “incredibly stupid”, claiming most of the benefit would go to big business, with McDonald’s getting a £450 million boost, and 45% of hospitality firms paying no VAT anyway.
Kerridge dismissed the £10 billion figure as a “spreadsheet number”, arguing it fails to account for money reinvested into growing businesses and savings from preventing closures. “We have 21 businesses shutting every week - that’s 21 businesses that aren’t bringing any money into the Exchequer,” he said. “This is about long term growth.”
He acknowledged big businesses would benefit but asked: “Do you care about McDonald’s making a bit more money or about your local pub or your coffee shop or your independent restaurant?”
Impact of Cost Hikes
Kerridge, who backs the VATsTheProblem campaign, claimed halving the tax would “100%” make the difference for some businesses. “The top line costs that have come in are absolutely huge. You've got business rates, food inflation, utility bills and the minimum wage. Those are cost increases you cannot pass on to guests. It's a real fine line between operational profit and places closing.”
A survey by trade bodies UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster revealed almost a quarter of firms in the sector are operating at a loss, up from one in seven three months ago, and 5% say their business is no longer viable.
Industry Leader's Perspective
Nick Mackenzie, boss of pub giant Greene King, said any savings from a VAT cut would likely be reinvested rather than passed on to customers. Greene King is owned by Hong Kong billionaire Li Ka-shing’s conglomerate. “There are businesses - particularly smaller businesses - that need this breathing space to be able to firstly survive and then grow in the future,” he said. “If a business closes down, that means the government is getting less in tax take. If you can reverse that and get into net growth, then that will create more tax revenue and more jobs.”
