Labour risks 'hammerblow' for struggling pubs with plans for 'taxi tax'

Labour's plans to slap full VAT on the cost of every minicab journey has been branded a "hammerblow" to struggling pubs and clubs. The Night Time Industries Association (NTIA), which represents Britain's night time economy, has warned that the "taxi tax" will hike prices for millions of people and hurt a sector already suffering from regulation and high costs.

Michael Kill, CEO of the NTIA, said: "Our night time establishments, including pubs, restaurants, and clubs, rely heavily on people using cabs. This new tax would be a hammer blow not just to people enjoying a pint or a night out, but to the jobs and livelihoods of people working in the industry. It is already difficult for people to get home after a night out and slapping a new tax on one of the few available options would hurt businesses nationwide. We urge the government to stop the taxi tax to protect jobs, safeguard the night time industry and prevent a massive new tax on working people."

The NTIA said private hire vehicles (PHV) and minicabs provide essential transport services for people on a night out and workers in the night time economy, particularly when there are no public transport options available.

Adding VAT to minicab trips will force up fares by up to 20%, putting vital late-night transport out of reach for many, which will mean fewer people able to afford a night out and lower footfall for struggling hospitality businesses.

Nearly half of PHV and minicab users (49%) said the most common reason for using them is to get to or from a night out.

While nearly four in 10 (38%) of people use a PHV or minicab service at least once a month, rising to 58% of 18-34 year olds

If the taxi tax is introduced, half of Britons say they would cut down how they use these services and 52% say that the additional cost would make them unaffordable all together.

This polling, for the Stop the Taxi Tax coalition, found that 71% of Brits are opposed to the "taxi tax".

The Stop The Taxi Tax campaign is made up of over 100 local minicab and PHV operators, as well as charities and groups such as the Survivors Trust, the NTIA and the Rural Services Network.

A spokesman for the Stop the Taxi Tax campaign said: "This would be a real blow to people who enjoy a few drinks after work, want to have a meal out, or work in our pubs, bars and restaurants, and rely on minicabs to get home or to work. It is a revellers tax and will substantially increase the cost of a night out.

"The Taxi Tax breaks Labour's manifesto promise not to raise VAT and would make it harder for people to work and to support their local economy. We urge the Government to Stop the Taxi Tax to protect jobs and passengers from dramatically higher prices."

The Treasury has been contacted for comment.