Tue, 11 Nov 2025

Tue, 11 Nov 2025 Lib Dems call for 5% VAT cut for pubs and restaurants

The party also wants to axe the renewables levy from bills, funded by a windfall tax on big banks.
The Liberal Democrats are urging Chancellor Rachel Reeves to cut VAT by 5% in this month's budget, from 20% to 15%, to support the UK's struggling hospitality sector and its customers. Deputy leader Daisy Cooper says the government should help people enjoy "small joys" like eating out or going to the cinema without breaking the bank. According to polling, over half of people think it is now unaffordable to go to a pub or restaurant. The Lib Dems propose funding this cut by introducing a new windfall tax on big banks, which could raise £30bn between 2025 and 2030. The party claims their two-pronged approach would save the average family £270 per month over the next 18 months, with the VAT cut costing £7.5bn and replacing the current renewables levy costing £4.5bn. The windfall tax on big banks is estimated to bring in about £7bn per year. The Liberal Democrats are also calling for energy bills to be reduced by £90 a year by axing the main renewables levy, which would bring energy bills down to the second lowest level since 2022. This would cost around £12bn and would require setting up a new Energy Security Bank, which would use some of the revenue from the windfall tax. The party's proposal is in line with the Conservatives' calls for an end to the renewables obligation levy, but differs from Labour's focus on expanding renewables and ending the UK's reliance on fossil fuels.
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