In a fervent plea to the government, four prominent figures in the UK culinary scene have called for a reduction in value-added tax (VAT) for pubs and restaurants to 10%. This urgent request comes as the hospitality sector grapples with unprecedented challenges, with industry leaders lamenting that the current economic climate has made it the most arduous time to operate. Renowned chefs Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan expressed their concerns during an appearance on BBC Newsnight, highlighting the dire financial realities facing their businesses.
A Call for Change
The chefs’ proposal aims to alleviate the financial strain on hospitality businesses, which have suffered greatly in recent years. “We’re not making any money whatsoever, and we’re just keeping our heads above water,” Rogan stated, underscoring the struggles faced by many in the industry. Kerridge echoed these sentiments, criticising the government’s tax approach and suggesting that the current VAT rate of 20% is detrimental to business viability.
The hospitality sector has endured a tumultuous period, marked by the severe impacts of the Covid-19 pandemic, soaring energy prices resulting from geopolitical tensions, and a subsequent decline in consumer spending due to the ongoing cost of living crisis. The industry has seen a troubling trend, with three hospitality establishments closing their doors every day since the beginning of 2026, according to UK Hospitality.
The European Context
VAT, a tax levied on goods and services, stands at 20% in the UK, one of the highest rates in Europe, surpassed only by Denmark. In contrast, neighbouring countries such as Germany (7%), Ireland (9%), France (10%), Italy (10%), and Spain (10%) operate with significantly lower rates. The chefs argue that a reduction in VAT would help level the playing field, offering much-needed relief to businesses struggling to remain afloat.
Kerridge highlighted a multitude of factors inflating operational costs, including increased National Insurance contributions, business rates, and the rising minimum wage. He suggested that the industry has reached a tipping point, where passing additional costs onto consumers is no longer an option. “It just doesn’t work because it will stop people coming out,” he warned.
The Employment Dilemma
The hospitality sector is a critical source of employment for young people, with 28% of 18 to 20-year-olds working in this field, as reported by the Institute of Fiscal Studies. However, recent findings indicate a troubling decline in job opportunities, with over one million young individuals currently not engaged in education, employment, or training—the highest figure recorded in over a decade.
In response to these alarming trends, the government announced plans to create 300,000 work experience and training placements across various sectors, including hospitality. Yet, industry leaders like Allen Simpson, chief executive of UK Hospitality, argue that reducing employment costs is essential for fostering job creation and supporting young workers. “The government needs to make it economically beneficial to employ young people once again,” he asserted.
Echoing these concerns, Rogan noted that when financial pressures mount, investments in youth training and sustainable practices are often the first casualties. He advocated for a public discourse on the implications of restaurant closures, warning that a decline in such establishments could lead to a more isolated society, where human interaction diminishes in favour of screens.
A Government Response
Government representatives, including Cabinet Minister Pat McFadden, have acknowledged the ongoing challenges faced by the hospitality sector. While McFadden indicated that the government is open to considering tax reductions, he emphasised the need for holistic decision-making in light of rising expenditure demands. “The Chancellor has to make these decisions in the round,” he remarked, highlighting the complex interplay between taxation and public spending.
Despite some temporary measures, such as the VAT reduction on children’s meals announced by Chancellor Rachel Reeves, chefs like Gill have described these efforts as inadequate. She characterised the initiative as a “very poor attempt” to support the sector, warning that it may lead to loopholes and misapplication rather than delivering genuine benefits.
Why it Matters
The hospitality industry is more than just a cornerstone of the economy; it is a vital source of community connection and employment. As the calls for a VAT reduction gain momentum, the implications extend beyond mere financial relief for businesses. A thriving hospitality sector fosters social interaction, nurtures local economies, and provides essential opportunities for young people. Without decisive action, the risk of a diminished hospitality landscape looms large, threatening not only jobs but the social fabric of communities across the UK.
