Could lifting VAT on pubs create 320,000 new jobs?

BEDFORD brewery Wells & Young’s is helping to lead a battle to reduce the VAT charge on pubs and restaurants across the country.

Thursday, 2nd February 2012, 10:35 am

12 months ago value added tax charged in pubs on drink, food and accommodation was raised to 20 per cent.

But the Independent Family Brewers of Britain reckons that bringing VAT down by five per cent could create between 140,000 and 320,000 jobs in the UK hospitality sector, many of which would be for 16 to 24-year-olds. And the group reckons that this would be welcome news as youth unemployment hits a 17-year high of one million.

Paul Wells, chairman of the Family Brewers, said: “Pubs are beleaguered with tax increases and legislation so this campaign is to kick-start some economic growth and help licensees get their businesses into growth.

“Reducing VAT will give a boost to the pub sector and help employment as pubs get busier; this will particularly help youth unemployment as pubs take on junior help.”

The Independent Family Brewers of Britain currently operates around 4,200 pubs in the UK, and its members include some of the most respected brewers in Britain.

Its members represent a distinct and unique sector of the UK brewing industry, owning regional breweries and pub estates, with the majority being private, family-run businesses such as Wells & Young’s.

Family Brewer members’ currently employ around 36,000 people across their breweries and pubs.

Similar campaigns have achieved success in Germany, Belgium, Sweden and France, where a tax reduction from 19.65 per cent to five led to the creation of 21,700 jobs in the first year alone.

Jacques Borel, the French hospitality veteran and lobbyist, said: “A VAT rate cut is essential for the UK economy; the hospitality industry is ideally placed to help kick-start this because jobs can be created relatively quickly and at relatively low cost.”