Ravneet Gill backs VAT cut for hospitality on Newsnight
ravneet gill joined Simon Rogan, Tom Kerridge and Yotam Ottolenghi on Two's Newsnight on Thursday 28 May to call for lower VAT for hospitality businesses. She said profit should not be treated as a "dirty thing" and tied lower profits to growth, hiring and reinvestment.
Gill said, "We need profit. Profit is going to provide growth, so we can regenerate our areas and employ more people." She also said the recent hike in minimum wage was stopping her from hiring young people at her restaurant Gina in Chingford, north London, which she opened last year.
Rogan and Kerridge on costs
Rogan said he had been open for 24 years and that it had never been more difficult to run his businesses. He added, "We're not making any money whatsoever, and we're just keeping our heads above water."
Kerridge said his margins had been "completely eroded". He said most of his businesses were running at around 100% cost, with one or two at maybe 115% cost, and argued that a reduction in VAT would let operators breathe and reinvest.
Ottolenghi on VAT and inflation
Ottolenghi said VAT was back up to 20% and said businesses were struggling because of higher tax, energy and ingredient costs. He described the situation as very difficult and said it applied to businesses, bakeries, cafés, pubs and hotels.
The same day, a government-backed report said one in eight 16- to 24-year-olds were not in education, employment or training. Gill’s comments linked that labour pressure to the higher cost of taking on younger staff, while UKHospitality said the government must make it economically viable for employers to create roles for young people.
Government pressure on VAT
The call from four hospitality owners put the focus on a specific policy lever: VAT. For businesses already absorbing tax, energy, ingredient and wage increases, a cut would change the immediate cost base they said was squeezing cash flow and limiting hiring.
Gill’s example was direct. Parents are asking her for first jobs for 17- or 18-year-olds, but she said she cannot justify that choice when the pay is the same as for a 23-year-old. For hospitality operators, the next pressure point is whether ministers respond to the demand to reduce VAT or leave firms carrying the current costs.
