The price of food and drink in 15,000 pubs and restaurants was cut by 7.5 per cent today as businesses came together to show the benefits of cutting VAT. Unfortunately the cut is a temporary one.
Wetherspoons has reduced the price a pint of John Smith’s from an average £2.29 to £1.83 and a plate of fish and chips from £6.99 to £5.59.
The man spearheading the debate is serial campaigner Jacques Borel and his VAT club. He has a record of success in delivering VAT cuts in Germany, France and Belgium.
Chains backing the campaign include Wetherspoons, Punch Taverns and Fullers as well as the Campaign for Real Ale.
The campaigners have labelled the event "Tax Equality Day". The aim is to draw attention to the fact that while food and booze in pubs and restaurants is subjected to 20 per cent, supermarkets are free to operate without burdensome levels of VAT.
George Osborne hiked VAT from 17.5 per cent to 20 per cent in 2011. However, it is not just VAT on pub food and drink Borel's fellow tax crusaders are hoping to slash against but also VAT on visitor attractions and hotel accommodation.
"Our message is clear - a reduction in VAT on a long-term basis will generate growth and create jobs in the important leisure and hospitality sector", Borel said.
In February the government decided not to cut VAT because it would lose too much revenue. Last years event helped to boost sales by up up to 20 per cent in some places.
A Treasury spokesperson responded to the campaign:
We are committed to supporting the leisure and hospitality industry and have cut the tax on a typical pint of beer by one penny at Budget 2013 and by a further one penny at Budget 2014, making a pint of beer 8p cheaper than under inherited duty plans.