Industry leaders call for VAT cut to help 'NEETs'

Some of the hospitality industry's biggest names have spoken up in favour of a ground-breaking proposal that would see thousands of new jobs created in the sector in return for a Government commitment to slashing VAT.

Whitbread chief executive Patrick Dempsey said that he would be prepared to make a commitment to take on "hundreds of young people" - especially from the so-called NEET generation (not in education, employment or training) - if the UK Government were to cut VAT to 5%. He then urged the rest the hospitality sector to follow suit.

Dempsey was speaking at the Leaders Panel, the keynote event at HOSPACE, the annual conference for members of HOSPA (Hospitality Professionals, Finance and IT), at the Sofitel, Heathrow.

His comments - which echoed a call on the same day from former foreign secretary David Miliband to cut VAT - followed an update by British Hospitality Association (BHA) chief executive Ufi Ibrahim, who explained that a delegation from the BHA had held several meetings with Treasury officials who "told us that if they were making the decision (to cut the rate) based on a business case then they would say yes".

Fellow panellist Robert Cook, outgoing chief executive of Malmaison and Hotel du Vin, who recently became HOSPA's first president, also supported the idea, along with Casey McDermott, vice-president of distribution marketing operations at IHG.

"It's about give and take," Cook told Caterer and Hotelkeeper. "In order to get a concession of that magnitude, industry will have to make a genuine commitment on this sort of scale."

Graham Wason, an independent hospitality consultant who is leading the BHA's negotiations with the Government, told Caterer and Hotelkeeper he was pleased with how seriously the Treasury was dealing with the issue.

"It's the first time we've sat down with the Treasury and they've invited us to come back so discussions are very positive," he said.

"Talks have been going well. They are going to lend us the model they use to look at proposed policy changes and we will be sharing data with them. If we could reach an agreement before the Olympics that would be ideal because the industry and the economy would start seeing the benefits of a rate cut even sooner."

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By Elizabeth Mistry

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