Budget 2025: Richard Foord MP calls for hospitality VAT to be cut, as businesses and families struggle
Richard Foord, MP for Honiton & Sidmouth, has called on the Chancellor to cut the tax on meals, staycations and days out, in the Budget next week. This Mr Foord says, would support hospitality businesses, as well as residents who are struggling to afford such activities.
The move has been backed by local business owner, Ruud Jansen Venneboer, who runs Mazzard Farm Holiday Cottages, near Ottery St Mary, with his wife, Jacqueline.
Devon is a major tourist draw
Mid- and East Devon is a significant tourist draw, with its beautiful rugged beaches, clifftop walks and quaint coastal market towns and villages, such as Sidmouth, Branscombe, Beer and Seaton.
And the South West Coast Path, a major economic driver for local tourism, runs through a large chunk of the constituency, stretching from Sidmouth in the west to Lyme Regis in the east.
A perfect storm of financial pressure
Mr Foord said: “The cost of living, increases in National Insurance contributions for employers, and unreliable weather has created a perfect storm for the local hospitality sector. Tourist businesses are often operating on tiny profit margins, if they make a profit at all.
“Only last week, we saw the wonderful Pecorama attraction close - a much-loved family visitor destination, given that it was profitable for just four months of the year. It’s very sad – both for the business itself, and for the local economy.
Supermarkets selling alcohol
Mr Foord added: “People are staying in more these days with takeaways, and supermarkets are selling more alcoholic drinks than pubs and because wages make up a significant part of hospitality’s costs, the rise in National Insurance and higher minimum wage has had a huge impact on tourist businesses. The difference between the price of a pint in a pub or restaurant, compared with a supermarket has never been wider.
“Income generated by a windfall tax on banks could fund a cut to hospitality VAT of 5%. My Liberal Democrat colleagues and I consider that would be an excellent way to keep our local pubs, restaurants and holiday cottage industry on its feet."
Mr Jansen Venneboer, said: “Any hospitality business will tell you that each relies on the other. So, for our holiday cottages to continue to appeal to visitors, we need local pubs to stay profitable and local attractions to remain open. In turn, they need good quality local places for their customers to stay, as well as needing valued regulars to be able to afford to go out once in a while.
It's tough for UK hospitality to compete with continental holidays
“What we have been noticing is that more guests are booking from abroad, whilst UK guests are often leaving booking until the last minute or booking shorter breaks. There are also fewer families booking. It is increasingly tough for us to compete with the draw of overseas holidays (where VAT is much lower), even in years when the weather has been good, such as the most recent summer.”
Mr Jansen Venneboer continued: “Our industry has been asking for something like this for years, and it’s been frustrating that no minister has ever listened. I do think that a hospitality VAT reduction to 15% would help prevent some local businesses that are teetering on the edge, from going under.”
The Chancellor will deliver her Budget next Wednesday (26 November).