Something rather unusual happened this week - an unlikely alliance was formed over an unlikely subject. You may have noticed that there's a campaign afoot to persuade the government that it would be a really good idea to reduce VAT in the hospitality sector from the current punishing 20% to 5%.
The move, it's argued, could create up to 320,000 jobs, with many of these for 16 to 24 year olds.
Now, there are those who argue this is unwinnable. Their argument goes that the nation's balance sheet is too messy right now for the government to contemplate a move that would reduce its tax-take in the short term.
But this week saw real progress in the campaign being led by French entrepreneur and lobbyist Jacques Borel to convince politicians that there's a case for targeted cut in VAT. The family brewers of Britain threw the combined weight of their mash tuns behind Borel. And this wasn't just woolly support in principle but rather proper colour-of- your money stuff. The family brewers stumped up £240,000 to support the lobbying campaign.
At this stage, I should declare an interest – my company, Propel Info, is working with fellow publicist Eddie Gershon to create awareness of the campaign. But regardless of the direct link, I think this is a remarkable step by the family brewers. Chairman of the Independent Family Brewer of Britain Paul Wells tells me he thinks the VAT campaign is more likely to be won than the other major tax bugbear – the punishing duty escalator on beer that means year after year beer prices in pubs climb steeply.
On the VAT campaign, Paul says: "Pubs are beleaguered with tax increases and legislation so this campaign is to kick-start some growth and help licensees get their businesses into growth. Reducing VAT will give a boost to the pub sector and help employment as pubs get busier; this will particularly help youth unemployment as pubs take on junior help."
And so it is that the family brewers move shoulder-to-shoulder with an unusual set of allies – JD Wetherspoon, Pizza Hut and the Mandarin Oriental hotel group have also put hard cash into the campaign.
The job now is to make the case for reduced VAT at every opportunity.
This week, the argument started to penetrate the up-market national media with good coverage across a range of journals.
In a leader column, The Independent stated: "There is a logical business and health case for looking again at the very big difference between the prices charged for drink in supermarkets and those in restaurants and pubs. Many supermarkets clearly use alcohol, especially beer, as a loss leader, and one way they can do this is by cross-subsidising from their VAT-free food."
And in the London Evening Standard columnist Nick Goodway noted: "The campaign is only just starting, but it has big backing and makes sense. It could be just the stimulus package that Chancellor George Osborne might care to announce in his November 2013 statement."
The argument is a long way from being won. But it has one big advantage – it makes sense in all manner of different directions. The family brewers have one thing in common with their allies in the campaign – a business model that has stood the test of time. Anyone in the sector with an eye on the long-term, I believe, will recognize this is a campaign that needs to be pursued with all the tenacity, determination and stamina the sector can muster.
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