Plaid Cymru backs push to slash hospitality VAT to 10%
Emily Price
Plaid Cymru MP’s are backing calls for the UK Government to reduce VAT for the hospitality sector to 10%.
Ynys Môn MP Llinos Medi and her colleague Dwyfor Meirionnydd MP Liz Saville Roberts both voiced their strong support for the growing industry-wide campaign on Wednesday (June 3).
The call comes amid a nationwide push from hospitality leaders, businesses and industry bodies urging ministers to lower the current 20% VAT rate, to bring it in line with Europe.
Hospitality bosses argue their businesses operate on very tight margins and struggle to absorb 20% VAT alongside rising food, energy, wage and rent costs.
A UK Parliament petition calling for the government to introduce the tax cut has gained almost 10,000 signatures.
Petitioner Craig Wilkinson said: “We believe a permanent reduction to 10% VAT would save jobs, keep venues open, support apprenticeships and skills, and strengthen high streets – it would help businesses survive and continue contributing billions to the UK economy.”
Secretary of State for Work and Pensions Pat McFadden acknowledged the government had “asked business to contribute more”, adding “we help them where we can”.
Both Plaid Cymru MPs highlighted the “vital role” hospitality plays in local economies across their constituencies, supporting jobs, tourism and communities.
Llinos Medi said: “Hospitality businesses across Ynys Môn are the backbone of our local economy, from cafés and pubs to restaurants and visitor attractions.
“Many are facing unprecedented pressures from rising costs, and the current VAT burden only adds to those challenges. Lowering VAT to 10% would provide much needed breathing space, helping businesses to keep prices down, protect jobs and continue serving our communities.
“As Chair of the All-Party Parliamentary Group on Hospitality, Events and Food and Drink in Wales, I have heard directly from businesses across the sector about the urgent need for support, and a reduction in VAT is one of the most effective steps the Government could take to help them survive and thrive under increasing pressure.
“I have previously called for a reduction in VAT alongside other Parliamentary colleagues in my role as Chair of the APPG on Hospitality, Events and Food and Drink in Wales ahead of the 2025 Autumn Budget.
“It is imperative that the UK Government take these measures in order to protect this sector that contributes so much to Wales’s economy.”
Liz Saville Roberts added: “The reality for many hospitality businesses across Dwyfor Meirionnydd is stark – rising costs combined with a high rate of VAT are putting livelihoods at risk.
“The VAT’s The Problem campaign rightly draws attention to this unsustainable pressure.
“A reduction to 10% VAT would not only ease that burden, but also stimulate growth, boost tourism, and help ensure that our high streets and rural enterprises continue to thrive.
“It is not sustainable for the UK to maintain one of the highest VAT rates on hospitality in Europe – second only to Denmark – while expecting businesses to remain competitive.
“Bringing VAT down to 10% would level the playing field and help ensure our tourism and hospitality sectors can compete and grow.
“The UK Government must recognise the impact this is having in areas like ours and act accordingly.”
Both MPs urged the UK Government to engage constructively with the sector and consider the long-term benefits of a permanent reduction in VAT for hospitality.
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Increase VAT for online purchases to 30% to fund a reduction for all high street businesses.
They will profit from it, not reduce prices. So you would just be making us all pay more for goods.
That’s not how market forces work. If one established business with loyal customers in a high street keeps the price the same to increase their profits, a competing business can set up over the road charging less thanks to cheaper VAT. The result is more businesses on the high street.
Well, I a more realistic option is to reduce business rates. It’s devolved so they can reduce rates, increase reliefs, change multipliers or completely redesign parts of the business-rates system. Rhun himself with said that business rates are ‘fundamentally broken’. Best of all they don’t have to go to cap in hand to Westminster to ask for this, and they can do it themselves.
That means they can go ahead and act positively. I suspect that some of our politicians prefer opportunities to complain at length. Pat McFadden’s recent disclosure about back bench Labour M.P’s speaks volumes about the realities within our political class.
That was my underhand point. They can actually do something themselves but genuinely think they prefer to moan at Westminster for not doing stuff. so in the end nothing happens.