Lake District businesses fear job losses and price hikes after VAT returns to pre-pandemic level

Hospitality leaders in the Lake District are warning that today's VAT rise could result in job losses and price hikes.

Pubs, restaurants and other venues benefited from a reduced rate as they struggled with the challenges of the pandemic. 

Jamie Shail from Rothay Manor Hotel in Ambleside told ITV Border: "That VAT saving has gone towards helping the business cover the borrowings or the losses that were made during those periods of time.

"Since then as I'm sure everyone knows, prices have gone up quite a lot and those costs have all been hidden within that VAT saving at the moment.

"Last Summer was amazing. I don't think we'll ever see the likes of it again but both lockdowns ate every single penny that pretty much every businesses up here had reserved.

"And I would have said that most people are still not back to within 50% of where they were before the first lockdowns."

Credit: ITV Border

The UK government says support is still available - and as things get back to normal, it'll bring a boost to the industry.

Many businesses say it's putting additional pressure on an already struggling sector.

Zara Atkinson from the Unicorn Bar said: "The hospitality industry is run predominantly on foreign workers and unfortunately because they weren't able to remain we lost a lot of staff.

"On top of that you had covid so when people got into furlough perhaps they found other alternative employment and they just haven't returned.

"We're not able to fully open our pubs we don't have a chef in this one at the moment. Because the two things happened so quickly covid overt-took Brexit and I think what we're seeing now is the impact of Brexit more than covid.

If Zara had the choice between VAT going back down to 12.5% or foreign workers being able to come in as they were before Brexit, she would choose the latter.

She said: "That's the biggest impact. The cost will go back, you know what I mean? That will be absorbed and that will come once you're busy, but you can't run anything unless you've got a full staff team."