Hospitality industry demands Prime Minister Andy Burnham deliver on VAT cut pledge

More than 800 hospitality businesses, backed by a coalition of the UK’s most prominent celebrity chefs, have written an open letter to Prime Minister Andy Burnham demanding he follow through on his promise to slash VAT for the sector.

The letter warns that without a 'fairer tax burden' to protect pubs, restaurants, and hotels, the industry faces an accelerating wave of closures, job losses, and a steep drop in employment opportunities for young people.

The campaign, running under the banner #VATsTheProblem, is holding the Prime Minister to statements he made in February when he was Mayor of Greater Manchester. At the time, Burnham publicly advocated for a hospitality VAT rate aligned with continental Europe to protect the social fabric of local high streets. A petition supporting the move to a 10 per cent rate—the European average—has gathered more than 370,000 signatures.

Who is lobbying the Prime Minister?

The signatories span every corner of the British leisure industry. High-street giants such as Wetherspoons, Greene King, Mitchells & Butlers, and Fuller’s have joined forces with restaurant chains including Wagamama, Pizza Express, and Franco Manca. Hotel groups like Marriott International and Best Western, alongside leisure operators Center Parcs and Parkdean Resorts, have also added their names.

However, the vast majority of the 800 signatories are small and medium-sized independent operators, including single-site country pubs and family-run hotels.

The effort is heavily backed by culinary heavyweights. Chefs including Angela Hartnett, Heston Blumenthal, Andi Oliver, Clare Smyth, Jason Atherton, Nathan Outlaw, Paul Ainsworth, and Tom Kerridge have all signed the letter.

Why hospitality is struggling

The industry has long argued that the standard 20 per cent VAT rate disproportionately harms hospitality businesses because of their heavy reliance on staff.

"You can reclaim VAT on a product, but you can’t reclaim VAT on a person," chef Tom Kerridge said. He warned that the 20 per cent rate is holding the sector back at a time when businesses are already dealing with rising wages, food costs, energy bills, and business rates. "We’re seeing the consequences, with businesses closing their doors every single week," he added.

While the government introduced a £100 million aid package in its first week in office—which included a 20 per cent cut to business rates for pubs, clubs, and live music venues—industry figures argue that these measures only scratch the surface of what is required to keep businesses afloat.

Reform of the pubs code

Alongside the tax debate, the government has announced plans to overhaul how pub tenancies operate. Following a review of the 2016 pubs code, Ministers say they will work with publicans to secure fairer lease terms, longer-term agreements, and better pricing on beer.

Part of the focus is on the "free of tie" option, which allows tenants to break away from their parent pub companies, pay market rent, and source their drinks independently. The review revealed that between April 2022 and March 2025, fewer than 400 tenants actually applied for this status, with many deterred by high costs and bureaucratic hurdles.