Borel meets Treasury officials over VAT cut: VAT campaigner Jacques Borel met with Treasury officials this week to discuss a cut in VAT for the hospitality sector as a way of creating jobs.
Borel, who has successfully lobbied to reduce VAT for hospitality across Europe, spent almost two hours with officials setting out the case for lower VAT. The Jacques Borel VAT Club has support from 40 leading sector companies including Prezzo, Pizza Hut, JD Wetherspoon, Fuller’s, Shepherd Neame, St Austell, Mandarin Oriental and Charles Wells.
Borel said: “I had an excellent meeting with the Treasury. I explained that across Europe countries like France, Belgium, Germany, France, Sweden and Finland have reduced VAT and seen employment creation results that have been better than anticipated. In France, I forecast a reduction in VAT would create 105,000 jobs. In fact, 225,000 jobs were created.
“I explained that we have estimated a reduction in VAT to five per cent for the hospitality sector in the UK would create between 290,000 and 670,000 jobs. Of the savings for companies, we estimate 60 per cent would benefit customers in the form of reduced prices, 20 per cent would be spent on investment and improvements, 15 per cent would be passed on to employees and five per cent would go to increased profits.
“The priority today is unemployment and reducing it. I was asked why VAT should be reduced for the hospitality sector. I made the point that VAT should be reduced for other industries where jobs can be created quickly – the construction industry, for example. I argued that the government must re-invest in the form of reduced VAT in those industries where they will get fast results. Building a rail system to ensure a faster train service between London and Edinburgh might be a sensible five-to-ten year investment, but a reduction in VAT within the hospitality industry will create many jobs in a matter of months.”
Borel, who was accompanied to the Treasury meeting by the Association of Licensed Multiple Retailers’ strategic affairs director Kate Nicholls, is also attending Conservative, Labour and Liberal Democrat annual conferences to meet MPs and publicise the case for lower VAT.