The boss of pub operator Marston’s is calling for a permanent reduction in VAT to help the hospitality industry recover and ensure young people can continue to access work and skills development available at pubs and restaurants.
Ralph Findlay said the move would assist an industry that’s been “hit hard” and help aid young workers who will play a “key” part in economic recovery.
It comes as Marston’s, which owns the Harbour Springs hotel in Peterhead and the Three Witches in Inverness, reported “significantly improved” trading.
Following the lifting of indoor restrictions in pubs, Marston’s said it had reopened about 70% of its entire estate and trading for the period to July 24 is now running at 79% of 2019 levels.
The company said the stronger performance had been driven by additional food covers, outdoor investment, warmer weather and the benefit of the delayed Euro 2020 tournament.
We need conviviality, sociability and a place to celebrate
Mr Findlay, who is due to retire at the end of October, described the past 16 months as “extremely difficult”.
He said: “Pubs are social spaces, and for pubs to prosper we need to be able to offer conviviality, sociability and a place to celebrate which we can now do as of last week.
“That said, there are challenges ahead as the sector starts out on the road to recovery with the immediate short term continuing to be uncertain and operationally disrupted.
“The tone of Government messaging will be an important influence on consumer confidence. At present, the message is one of caution.
There are challenges ahead as the sector starts out on the road to recovery with the immediate short term continuing to be uncertain and operationally disrupted.”
“We believe that a Government review of the business rates system is long overdue and that VAT reduction should be permanent since the hospitality industry remains one of the most heavily taxed sectors.
“This would assist an industry that has been hit hard and aid hospitality’s employment and development of young workers which will be a key part of the UK’s economic recovery.
Pubs are part of the social fabric
“Despite these challenges the role that the pub plays in the social fabric and culture of Britain as demonstrated by the pent-up demand and the rapid return of customers, is needed as never before, and therefore we are confident in our future.”
Marston’s previously recorded pre-tax losses of £105.5million in the 26 weeks to the start of April, as it was hit hard by the Covid-19 lockdown.
Wolverhampton-based Marston’s runs around 1,500 pubs, with 21 sites in Scotland. It also makes beers under a joint venture established with Carlsberg last year.
Marston’s announced earlier this month that Andrew Andrea would replace Mr Findlay as chief executive from October 3.