PUBS and restaurants in Swindon are throwing their support behind a campaign to drop VAT from 20 per cent to five per cent in a bid to boost the economy.
The campaign, called Tax Parity Day, invited pubs and restaurants to drop their VAT by 7.5 per cent yesterday to highlight the potential benefits of a decrease in the tax levy.
Phil Saunter, director of Los Gatos on Wood Street, signed up to the campaign after witnessing how a drop in VAT had given a much-needed shot in the arm to the hospitality industries in Spain and France.
“We think it an extremely good idea,” said Phil. “We have got the French and the Spanish restaurants, and we are very much aware of the influence it is having on the hospitality industry in countries like Spain. “They have reduced it to five and a half per cent in France and seven per cent in Spain, which is doing wonders for their economy.
“Spain has been in such a bad way recently, and you can really see the benefits there. In France, employment in the sector is up, and business is up. It has saved 30,000 jobs. The benefits to the economy in terms of cost and employment are huge, they are making more from tax because more people are in employment and the level of sales goes up as well because businesses can drop their prices.
“While VAT goes down, the benefits of increasing the business outweight the losses in taxes.”
The UK drive was sparked by Jacques Borel’s VAT Club, after the lobbyist secured a reduction in VAT in France.
The JD Wetherspoons pub chain, which owns The Savoy, Groves Company Inn, Sir Daniel Arms, and the Dockle Farmhouse, also joined in the campaign yesterday.
The duty manager at Sir Daniel Arms said: “Customers are always positive whenever there is a drop in price, but it is too early in the day to say whether we have had an increase in business. ”
Los Gatos were asking their customers to lobby local MPs if they agree with the campaign.
“We have a mailing list of 500 people, and we told all of them that the campaign was going on,” Phil said. “We were very busy on the day, but then we are always very busy and it is not necessarily a result of the campaign. We have reduced all of the food prices to what they would be if VAT was only five per cent. That means a reduction in price of 12.5 per cent. That means for example a steak that used to cost £14.95 went down to £13.08.
“We are giving everyone who visits us an explanation of why we have done this, and we are asking them to lobby our local MPs.
“We want the reduction to happen as soon as possible, but it is unlikely to happen until the next financial statement in November. I know the chances are slim, but the more support we get the better. I know David Cameron does not support it, but maybe if we put some pressure on his Conservative MPs we might be able to change his mind.
“Customers will always be happy with a drop in price, and as far as they are concerned anything to make products cheaper is a good thing, but this is about raising awareness that whenever people go to a bar or a restaurant, 20 per cent of what they pay goes directly to the government.”