TIM MARTIN has called for VAT to be slashed on food and drink served in pubs and restaurants to help “reverse pub closures” and boost employment in less affluent areas.
The chairman of JD Wetherspoon spoke to The Irish Post ahead of today's Tax Equality Day when his pub chain will join thousands of businesses across the country in reducing their prices by 7.5 per cent.
The campaign aims to highlight the benefit to consumers of the price drop which would result if VAT reduced to five per cent from its current level of 20.
“We’re hoping that it’s going to be busier than Christmas Eve, New Year’s Eve and a bigger event than the Glastonbury Festival,” said Martin.
The 59-year-old added that he didn’t expect profits from his 900-strong business to be affected as long as “enough people turn up”.
Martin, who grew up in Dungannon in Tyrone, agreed the rate cut was an issue of parity with major supermarkets. They benefit from a VAT levy which offers them a zero rate of tax on food sold.
He added: “We understand that we’ve got to pay taxes and we’re happy to do that. We want to make a contribution towards the economy.
"It’s in all of our interests, but we shouldn’t pay more than the supermarkets. If we paid the same tax as Sainsbury’s we’d pay £98million less tax a year. And that’s just the VAT on our food sales.”
Asked if tax should be increased for supermarkets, Martin said: “No. We’re just saying that if the Government makes this investment that it will help employment and help raise tax [revenues], especially in less well-off areas around the country.
“Because you can get your Pret A Manger and your Starbucks in central London and Manchester and in the Notting Hills and Solihulls; but people can’t afford to pay the VAT in less affluent areas.
He added: “It will be good for employment in less affluent areas and will help reverse pub closures.”
Does Martin accept that in a country still operating a budget deficit any kind of tax reduction - let alone by 15 per cent - would be a hard sell to the Government?
“I don’t think so,” he said. “In the long run we’re sure to win, because each pint and each meal that’s sold in the supermarket produces a lot less tax and a lot less jobs than a pint or a meal sold in a pub or a restaurant.”
He added: “I think the economics of that are very strong and the Government, by reducing taxes, will make more revenue for the country.
"And especially from the consumer’s point of view. It doesn’t make sense really to give supermarkets tax favours over and above pubs and restaurants.”
JD Wetherspoon has recently expanded operations into the Republic of Ireland, having secured its third site - in Dublin near Dun Laoghaire - while it was reported that the brand will plough €100million into the development of its network of pubs in the country.
In 2011, Ireland cut its VAT to nine per cent. Would Martin like to see a similar cut to five per cent?
“As I’ve a pub in Ireland, I’m gonna keep my mouth shut,” he joked. “I don’t want to get turned away at the border.”
The chain’s venture into Ireland has met something of a mixed reaction, with thousands of people joining a protest group on Facebook who support of independent pubs.
Martin said: “I think the general reaction has been very, very good. There’s always a bit of stuff on the internet, but the reaction from people we speak to has been a very positive one.”