Amy Walker and Joanna Partridge 

‘Not much difference’: few takers on first day of hospitality VAT cut

Much remained quiet or closed in centres of Manchester and London as measure came into effect
  
  

The Ivy Market Grill restaurant, Covent Garden
A restaurant in London on the first day of a VAT cut to entice people back to dine at or visit locations with the prospect of slightly lower prices while also offering some support to businesses. Photograph: Martin Godwin/The Guardian

Shoppers and workers were in scant supply in London and Manchester’s city centres on Wednesday, leaving few people to take advantage on the first day of a reduction in VAT for food, accommodation and attractions.

The chancellor, Rishi Sunak, in his summer statement last week, slashed valued added tax from 20% to 5% on goods and services including meals in restaurants, cafes and pubs, hot takeaway food and entrance to attractions such as zoos and museums.

The move is designed to entice consumers back to dine at or visit locations with the prospect of slightly lower prices while also offering some support to businesses which were closed for months during lockdown.

With Manchester’s city centre still missing the usual throngs of office workers and many of its museums and other attractions still closed, few people were around to take advantage of reductions over Wednesday lunchtime.

Angela K, 38, who had popped into The Moon Under Water Wetherspoon’s pub on Deansgate with her mum for lunch and red wine, said bar staff had told her “head office hasn’t been in touch yet” about changes, so they were unable to benefit.

“We would be more likely to go into a place that is going to pass on the savings,” she said, adding that while she thought it was important to help hard-pressed restaurants and bars, the economic fallout from coronavirus had left us “all in the same position”.

Because the VAT cut does not apply to alcohol, pubs that do not serve food in the city will not benefit. Tom Handsworth, a barman at Peveril on the Peak on Great Bridgewater Street, said offering discounts to entice customers back in was unfeasible. “There’s no real support for us [from the Treasury] really,” he added.

Outside Oxford Street’s Pret a Manger – which has slashed prices in line with the VAT cut – Matt, a lawyer working from an almost empty office, also felt independents needed more support.

“I would have gone to Philpott’s across the street if it had been open, because they’re a much smaller chain and could do with the help,” he said. Although he grabbed lunch from Pret, he had not noticed the price difference.

Back on Deansgate, Richard Katsouri of Katsouris Deli , which would be usually packed with professionals buying larger-than-life salads and mezzes, said it would be keeping the saving because it needed to push its prices up anyway. Instead, it has signed up to the eat out to help out scheme in August.

On a normal weekday in July, the roads and pavements of central London would usually be buzzing with traffic, tourists, shoppers and office workers, but some of the capital’s busiest areas including Leicester Square, Covent Garden and Chinatown remain largely deserted.

The area usually has the highest footfall in the UK, yet latest figures from retail data company Springboard showed footfall was 81% lower in June than the previous year, and many of the capital’s top visitor attractions remain closed.

Cristina Redondo, who was drinking coffee at a table outside a branch of Pret a Manger overlooking a quiet Trafalgar Square devoid of tourists, was unaware that the price of the drink had been reduced by the chain as the chancellor’s VAT cut on hospitality came into effect.

“For me it’s not about the money, as I’m in a good situation,” she said, “if you lose your job the first thing you stop is going out. I want to see places following proper rules like social distancing and staff wearing masks.”

Liz Pride, 64, was in a small queue for the National Gallery, one of the capital’s few galleries and museums which has reopened its doors.

Pride was not concerned that the gallery had decided not to pass the tax cut on to visitors through lower tickets for paid-for exhibitions.

“I’m not sure it would make that much difference,” Pride said, “although it would for my daughter, she is 26 and her job doesn’t pay that well.”

The prospect of savings had not brought many visitors to nearby Covent Garden, where the pre-lockdown lunchtime rush remains a distant memory, and where Westminster council has blocked roads to traffic to allow for alfresco dining.

“This outdoor area really appeals,” said Marc Tankmar, who had just eaten lunch with his wife at a sushi restaurant, which he noticed had charged them 20% VAT on their bill.

“We would not have eaten here inside, and if it was overly busy we wouldn’t be here either,” added Tankmar, who said he was still avoiding public transport. “However the service was good so I gave a tip.”

 

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