James Murray

James Murray

Labour (Co-op) — Ealing North

Speaking in the House of Commons on 12 November 2026

Debate

Hospitality Sector VAT: Local Economies, Employment and Growth

Contribution

Given we have a 4.30 pm cut-off, I had better make some progress. As the Minister responsible for the tax system, I have to consider the wider fiscal implications. VAT is one of the UK’s largest sources of tax revenue, helping to fund public services that households and businesses rely on. That means that any proposed VAT relief must be carefully considered against its affordability and whether it represents value for money for the taxpayer. His Majesty’s Revenue and Customs estimates that reducing VAT on accommodation and food and beverage services from the standard rate of 20% to 10% would cost around £11 billion a year, which is of course a significant amount of revenue. VAT is UK wide but even a similar such cut in Northern Ireland only would cost £300 million, as my hon. Friend the Member for Gower said. A more limited reduction would remain expensive: it is estimated that a reduction to 15% would cost around £5 billion a year and a 12.5% rate would cost around £8 billion a year.

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