Liberal Democrats Push for VAT Cut to Revive UK's Struggling Pubs and Restaurants

The Liberal Democrats have called for a 5% reduction in Value Added Tax (VAT) for pubs and restaurants in this month's budget, citing the need to support the UK's ailing hospitality sector and its hard-pressed customers. Deputy leader and Treasury spokesperson Daisy Cooper urged the Chancellor to cut VAT from 20 to 15, arguing that this would boost footfall in Britain's pubs, restaurants, and entertainment venues. According to Cooper, the government should step in to help people obtain "small joys," such as a meal in a restaurant. This could be funded by a new windfall tax on big banks, originally proposed by the Institute for Public Policy Research (IPPR) think tank, which Cooper claimed could raise around £30 billion in total between now and 2030. Recent polling from More in Common found that more than half of people believe going out to a pub or restaurant is now unaffordable. "People are working with their nose to the grindstone all month and have next to nothing left over after sky-high bills and spiraling food prices," Cooper said. "In years gone by, people knew they could look forward to fish and chips on a Friday night, but now that's a luxury many can no longer afford." Cooper emphasized the importance of supporting the hospitality sector, which has been severely impacted by the COVID-19 pandemic and subsequent economic downturn. The Liberal Democrats' proposal is not without precedent. A 15% VAT rate has been implemented in other countries, such as Ireland, with varying degrees of success. However, the UK's unique economic and cultural context would require careful consideration of the potential implications. The proposal has sparked debate among economists and policymakers, with some arguing that a VAT cut would disproportionately benefit larger businesses and wealthy individuals. Others have suggested that a more targeted approach, such as providing tax relief to small and medium-sized enterprises (SMEs), would be more effective in supporting the hospitality sector. The current status of the proposal remains uncertain, with the Chancellor yet to respond to the Liberal Democrats' call for a VAT cut. However, the party's proposal is likely to be closely watched in the lead-up to the budget, with many hoping that the government will take action to support the struggling hospitality sector.