Top chefs call for VAT cut as hospitality industry battles for survival
Tom Kerridge and Yotam Ottolenghi are among a host of top chefs calling on Rachel Reeves to slash VAT for restaurants as they warn of a looming catastrophe for the industry.
Restaurants say they have been left out in the cold after the Government has offered other hospitality and leisure businesses support to help with a mountain of rising costs.
Tom Kerridge, who is a familiar face on cooking television shows including Saturday Kitchen and Bake Off, said Labour’s approach to hospitality was ‘very, very wrong’.
Kerridge, whose site, The Hand & Flowers, was the first gastropub in the UK to be awarded two Michelin stars, said most of his businesses were ‘sat still or losing money’ as his margins have been ‘completely eroded’ by Government hikes.
He joined fellow chefs – including Ravneet Gill and Simon Rogan, plus Ottolenghi – in calling for VAT to be cut to 10 per cent to help businesses avoid closures, job losses and price cuts.
Ottolenghi, who has 11 restaurants, cafes and delis, as well as writing popular cookbooks, said the challenges facing the industry have ‘never been as hard’.
Tom Kerridge is among the top chefs to advocate for a VAT cut to help restaurants
‘Every pound that we take, a substantial amount of it just goes to the government for a different taxation,’ he said.
He said it was a ‘crippling’ environment for all hospitality venues, ranging from bakeries, cafes, pubs to restaurants.
Ottolenghi said: ‘It’s a very difficult situation. We are really struggling because we’ve had our tax burden increase. VAT is back up to 20 per cent – one of the highest in the world – and we have inflation in energy and ingredients. Every single thing we do is more expensive.’
Every single thing we do is more expensive.
Restaurant owners have criticised ministers after increases to employment costs including minimum wages and contributions to National Insurance payments over the past two years.
And they have also had to fork out for higher business rates from this April, despite a backlash resulting in the Chancellor U-turning on hikes for pubs and music venues.
They are also facing a consumer squeeze as the war in the Middle East has heaped pressure on household grocery and energy bills – all while hot inflation spikes businesses’ own ingredient and utility costs.
The Government earlier this month said it would reduce the VAT rate to 5 per cent for children’s meals, family admissions to visitor attractions and children’s soft play between 25 June and 1 September.
But campaigners and chefs say this must be extended more widely to other businesses.
‘The one thing that blanket releases the pressure is a reduction in VAT and bringing it in line with the rest of Europe. That would allow operators to breathe, would allow people to reinvest,’ Kerridge told BBC Newsnight.
Kerridge, who was among the prominent business leaders to support Labour before the 2024 general election, said he got a sense ministers were trying to listen to the industry.
But he added: ‘This is an area where they are getting very, very wrong.’
Chef Simon Rogan, who runs the three-Michelin-starred L’Enclume in Cumbria, said it had ‘never been more difficult’ in his 24 years of running the restaurant.
He added: ‘We’re not making any money whatsoever, and we’re just keeping our heads above water.’
Pastry chef and Junior Bake Off presenter Ravneet Gill also said she had been put off recruiting teenagers due to higher employment costs.
She said: For us, the shock has been employing people and how expensive it is.
‘We’re on a high street and I have parents come in and say “Can you give my son his first job?”. These are lovely 17- or 18-year-olds, and I would really like to, but when I compare them to perhaps a 23-year-old and the pay is the same, I can’t afford to do it.’
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