Nigel Farage’s proposal to cut taxes in order to aid pubs has faced criticism from an expert. The leader of Reform UK recently unveiled a £3 billion support package for pubs, to be financed by reinstating the two-child benefit cap if his party assumes power. Among the measures outlined are reducing VAT on the hospitality sector from 20% to 10%, which Reform UK claims will save the industry £1.7 billion annually and stimulate demand by lowering prices.

Additionally, the plan includes eliminating the employer national insurance hike for hospitality businesses, decreasing beer duty by 10%, and scrapping business rates for all pubs. The funding for these initiatives would come from reintroducing the two-child limit on Universal Credit, estimated to generate around £3 billion by 2029/30.

Expressing concern over the impact on the economy, the IPPR think tank refuted Reform UK’s projections, suggesting that the actual VAT revenue loss could be closer to £5.6 billion based on government data showing £11.7 billion in net VAT receipts from the hospitality sector last year. Professor Ashwin Kumar from IPPR emphasized the importance of supporting the hospitality sector but criticized the proposed funding mechanism, stating that it should not come at the expense of vulnerable families relying on such benefits.

In contrast, the Labour party has put forward its own set of measures to aid pubs, including a 15% reduction in the impending business rates hike for April and a two-year freeze on rates. However, critics argue that these measures may not be sufficient in light of rising costs and changing consumer behaviors, partly influenced by the cost of beverages.