Wetherspoons’ Chief Executive, Tim Martin, has announced that the VAT paid by pubs should be lowered to ensure customers get the best prices possible when purchasing alcoholic drinks. At present, Wetherspoons and every pub across the UK pay a rate of 20% VAT on all alcohol sold at their premises. This compares to the measly zero-rate tax that supermarkets are legally bound to pay on the same goods.
On the 20th September 2017, pubs across the UK staged a one day protest against what they deemed unfair discrimination by reducing all their prices by 7.5%. For Wetherspoons, this meant that all 900 of their branches stood in solidarity for ‘Tax Equality Day’, lobbying MPs to take a stronger stance in support of the hospitality industry. It’s estimated that if the VAT pubs pay was reduced by just 5% then an extra 78,000 jobs could be created across the UK.
Recently, British pubs have been faced very negative consequences due to the UK’s unstable financial state. For example, 2016 saw the number of pubs in the UK fall to its lowest level in a decade whilst their beer sales were overtaken by supermarkets the first time. However, are lower taxes the best solution to this problem?
Tim Martin argued yes in an interview with The Mancunion, claiming that easing taxes on supermarkets has led to “customers — including students — being unfairly encouraged by tax policies to buy beer and food from supermarkets, so thousands of pubs have lost trade and closed in the last decade.”
So, how do students feel about the possibility of alcohol prices lowering? Surprisingly, the proposition has received mixed responses.
Cameron, a third year History student told Student Life Guide, “duty on alcohol hugely helps the government. If it’s any cheaper it’ll just fuel binge drinking”. Cameron also expressed skepticism towards Tim Martin’s motives, adding “He’ll just boost the prices anyway despite the cheaper cost so that he makes more money”.
Harriet, a third year Chemistry student concurred with this view stating “For the individual cheaper alcohol does seem attractive, but people would inevitably abuse it and end up drinking even more. It feels like it could create a gateway for alcoholism”.
Not all students are against the move, however, with post-grad student Joe simply claiming that it’s a no-brainer as “booze should absolutely be cheaper because cheap booze [are preferable]”.
The government are yet to officially respond to the demand made by UK pubs but the response amongst the student community seems somewhat conclusive- although tempting, cheaper drinks would do more harm than good.