Chancellor Rachel Reeves has unveiled a temporary reduction in VAT on children's menu items from 20% to 5% for the summer months, part of a 'Great British summer savings' campaign. However, restaurateurs have dismissed the measure as a political 'soundbite' that will have little impact on families or the hospitality sector.
Industry scepticism
Will Murray, owner of London restaurant Fallow, which offers children's meals priced between £5 and £10, said: 'It's such a small soundbite that won't make any difference. Most kids' food is already discounted at the cost of the restaurant anyway: the VAT cut wouldn't even make up that shortfall.' He suggested that the government should focus on reducing childcare costs instead.
Daniel Crump, who runs the Greyhound and the Old Town Bistro in Beaconsfield, described the measure as merely 'symbolic'. He called for broader VAT reductions to bring the UK in line with European rates, noting that restaurants continue to face rising food, energy, and staffing costs.
Support from some quarters
Tim Martin, founder and chair of the Wetherspoons pub chain, plans to reduce prices on children's meals throughout the summer. 'We will reduce prices for children's meals during this time and it will be appreciated by parents and families,' he said. Martin also reiterated calls for VAT equality with supermarkets, advocating for a permanent reduction.
Industry calls for broader reform
UKHospitality, the lobbying group for the industry, indicated that while restaurants are likely to pass on savings to consumers, the decision rests with individual operators. Chair Kate Nicholls urged the government to view this as a 'downpayment' on a wider shift to a lower VAT rate for the entire sector. 'Our biggest competitors benefit from VAT rates that average about 10%, and can be as low as 7%, and the UK is a clear outlier,' she said.
The hospitality sector has long campaigned for VAT cuts on food and drink, pointing out that the UK's 20% rate is among the highest in Europe, where the average is around 12%. In Italy, for example, VAT on restaurant food is set at 10%.
