The proposal is based on a study by Bournemouth University Business School and Hospitality Voices and, Banks says, addresses criticism that a sector-wide VAT cut would benefit larger businesses that do not need the same support.
The initiative differs from the ongoing #VATsTheProblem campaign, spearheaded by chef Tom Kerridge and backed by major industry bodies, which calls for a permanent reduction in hospitality VAT from 20% to 10% regardless of business size.
Banks has been a prominent supporter of the campaign, which has attracted nearly 400,000 signatures at the time of writing.
“One of the biggest criticisms of our campaign has been: why do bigger businesses, like McDonald’s, need a VAT cut? It’s a fair challenge,” he says.
Ahead of the Budget, Banks says his motivation for campaigning is to protect jobs and save smaller businesses that are central to their communities.
He acknowledges that the proposed cut would carry a significant cost but argues that this must be weighed against the consequences of further closures, job losses and a shrinking tax base.
“This could help viable businesses survive, give others the confidence to open, and create meaningful growth,” he says.
Banks also highlights hospitality’s role in providing employment and training for young people, saying nearly 40% of its workforce is aged 16–24.
“These businesses give people their first jobs, teach them skills and offer careers,” he says. “If we’re serious about creating opportunities for young people, we need to support the businesses providing them.”
Banks - who is also behind York restaurants Roots, The Abbey Inn in Byland and The General Tarleton near Knaresborough - argues that the loss of pubs, restaurants and cafés has consequences beyond the economy, particularly in rural communities.
“Where I’m from, pubs are the beating heart of village life,” he says. “Our pubs, restaurants and cafés shape what our villages, towns and cities look and feel like. Once they’re gone, rebuilding them isn’t easy.”
Banks also calls on Prime Minister Andy Burnham to follow through on his earlier support for a lower hospitality VAT rate.
“Since taking office, he has been worryingly quiet on VAT. I hope he sticks to his word. This Budget will be the test.”